The Financial Action Task Force (FATF) declared that the Philippines has fulfilled its compliance requirements on February 21, 2025, following a visit by officials of the global money laundering and terrorist financing watchdog just a month earlier. The country has finally been removed from the “grey list” of countries that are under increased monitoring by the FATF due to certain deficiencies in its campaign against money laundering and terrorism financing.
The FATF placed the Philippines on its grey list in 2021, marking the country as unable to prevent or monitor illicit financial flows, including those linked to terrorism and dirty money, often facilitated by scams and illegal gambling.
Removal from the list is said to have improved the country’s credibility in the global financial system, making it more attractive to investors. It is expected to benefit overseas Filipino workers by speeding up and reducing costs of international business transactions and remittances.
While government officials celebrate this success, critics, especially human rights defenders, are raising alarms about the means used to achieve this outcome. A recent report published by the Philippine Center for Investigative Journalism (PCIJ) points out that “the Philippine government’s success and the FATF process itself are marred by allegations that the grey list exit campaign became the latest pretext for the crackdown and red-tagging of activists and human rights workers.” So-called “red-tagging” means the branding of individuals or organizations as “terrorist.”
Ephraim Cortez, president of the National Union of Peoples’ Lawyers (NUPL), observed that the government has exploited the FATF process to bring numerous terrorist financing cases against civil society organizations (CSOs), with the ultimate goal of silencing dissent in the country. According to NUPL, there was a 371% surge in the number of terror financing complaints filed by the government in 2024. Many of these were aimed at progressive organizations involved in humanitarian work, agrarian reform, environmental advocacy, and community development.
NUPL represents several non-profit organizations charged with terrorist financing. It is part of the Defend NGO Network, which has reported that at least 59 development workers in non-governmental organizations (NGOs) are facing terrorism-related charges and harassment. This includes 55 staff members from 19 organizations accused of financing or supporting terrorists.
A police memorandum detailing a case buildup for terrorism financing against Myrna Zapanta of Ilocos Sur, which was obtained by PCIJ, revealed the existence of a police operation called “Project Exit the Greylist.” Six complaints were filed against Zapanta for allegedly breaching the Terrorism Financing Prevention and Suppression Act of 2012. She was accused of being the regional finance officer of the Communist Party of the Philippines and having facilitated funds to supposed alleged front organizations Katinnulong Daguiti Umili ti Amianan, Inc. (KADUAMI) and Ilocos Center for Research, Empowerment and Development (ICRED).
Zapanta is a volunteer at the Ilocos Region Ecumenical Council (IREC) where she participates in relief operations in disaster-stricken areas and church gatherings. She denied all the charges, saying she is just an ordinary citizen.
NUPL pointed out that the police memo implies the cases are not the result of genuine financial investigations, but rather appear to be prearranged and filed without basis to advance a political agenda that focuses more on FATF compliance than on justice.
Criminal Investigation and Detection Group Chief Major General Nicolas Torre told PCIJ that the police memo is a confidential document and should not have been released to the public. He stands by the investigations carried out by his units.
NUPL submitted a report to FATF highlighting concerns about the government’s counterterrorism financing (CFT) regulations, which they argue are eroding civic space and fundamental freedoms.
In a statement on February 23, 2025, NUPL criticized FATF for congratulating the Philippines without acknowledging the “rampant misuse of counterterrorism financing laws to silence dissent and criminalize civil society.” It pointed out that “the surge in fabricated terrorism financing cases, arbitrary asset freezes, and instances of financial exclusion are not ‘unintended consequences’ of compliance; they are deliberate tactics used to satisfy the FATF’s mandates at the cost of human rights.”
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