Anti-Money Laundering (AML) in the Philippines

As it continues to grow as a financial and fintech hub in Southeast Asia, the Philippines must prioritise compliance with anti-money laundering (AML) regulations. The battle against money laundering and the funding of terrorism is still very difficult, though. Strong AML enforcement is more crucial than ever due to rising remittance flows, the growing use of cryptocurrencies, and an increase in digital banking activity. 

This guide will give a thorough rundown of the Philippines' AML framework, including pertinent laws, important regulators, necessary compliance requirements, and doable tactics for companies to stay in compliance. 

The Significance of AML in the Philippines 

The Philippines is especially susceptible to financial crime because of its position as a gateway to Asia and its changing financial environment. For example, large remittance inflows and the explosive expansion of virtual asset service providers (VASPs) have opened up channels for criminals to launder money. The Anti-Money Laundering Council (AMLC) and the Bangko Sentral ng Pilipinas (BSP) have strengthened regulatory measures accordingly.

Due to increased international scrutiny following its inclusion on the Financial Action Task Force's (FATF) "grey list" in 2021, the nation had to take decisive action to address shortcomings in its AML framework. 

Legal Framework: AML Laws in the Philippines

AML enforcement's legal framework is based on these historic laws:

1. The Anti-Money Laundering Act of 2001 (AMLA), also known as Republic Act No. 9160, lays the groundwork for stopping money laundering operations. 
2. The Terrorism Financing Prevention and Suppression Act of 2012, also known as Republic Act No. 10168, focuses on counterterrorism financing strategies. 
3. The Anti-Terrorism Act of 2020, also known as Republic Act No. 11479, fortifies the laws pertaining to the financing of terrorism and preventative measures. 
4. Republic Act No. 11521 (Amendments to AMLA-2021) increases the number of covered institutions, closes technological gaps, and tightens reporting requirements. 

When taken as a whole, these laws set forth the requirements for compliance, placing special emphasis on transaction monitoring, Know Your Customer (KYC) procedures, reporting requirements, and record retention.

Regulatory Bodies in Anti-Money Laundering

AML laws are enforced by a number of government agencies in a variety of industries:

• Anti-Money Laundering Council (AMLC) acts as the main body in charge of AML enforcement, intelligence collection, and supervision. 
• Bangko Sentral ng Pilipinas (BSP) oversees banks, fintech firms, and other financial organisations. 
• Securities and Exchange Commission (SEC) regulates the capital markets and makes sure that dealers, investment houses, and stockbrokers all follow the law. 
• Insurance Commission (IC) keeps an eye on AML compliance in the pre-need and insurance sectors. 

Together, these organisations identify hazards, set rules, and check for compliance in their specialised fields.

AML Obligations for Covered Company Types

Certain organisations, known as "covered persons," must implement strong AML procedures in accordance with the AMLA. These consist of: banks and other financial institutions; insurance brokers and companies; pawnshops and remittance service providers; real estate brokers and developers; jewellery dealers; casinos and online gaming companies; and virtual asset service providers (VASPs).

Primary Compliance Requirements 

CDD (Customer Due Diligence): 

Verifying all clients' identities in detail, paying particular attention to high-risk clients and transactions totalling more than PHP 100,000 (~$1,800) is crucial.

Suspicious and Covered Transaction Reporting: 

Submit Suspicious Transaction Reports (STRs) for any activity deemed suspicious, unusual, or inconsistent with a client's usual profile is essential.

File Covered Transaction Reports (CTRs) for each cash transaction that exceeds PHP 500,000 (~$9,000). 

Record Retention:

For a minimum of five years following the date of the most recent transaction or account closure, keep an extensive record-keeping system in place to preserve client and transaction data. Regulators and law enforcement organisations should have easy access to these records for audits, compliance reviews, and investigations. To prove due diligence and guarantee compliance, proper documentation is essential.

Major Money Laundering Cases in the Philippines

Reporting Suspicious Transactions in the Philippines

Suspicious Transaction Report (STR) 

When any unusual or possibly unlawful activity involving financial transactions is discovered, a Suspicious Transaction Report (STR) has to be submitted within five working days. Authorities can use this report to find and look into suspicious activity that might be connected to financial crimes like money laundering. 

Covered Transaction Report (CTR) 

For certain financial transactions, such as cash transactions totalling PHP 500,000 or more (roughly $9,000), whether completed in a single transaction or cumulatively over several linked transactions.

Structured or split transactions intended to avoid reporting thresholds, especially if they take place over a brief period of time, a Covered Transaction Report (CTR) must be filed. 

These reports are essential resources for fostering openness and stopping financial crimes in the banking and finance industry.

Note: To guarantee compliance and appropriate monitoring, all reports must be submitted via the AMLC's electronic reporting system.

EDD (Enhanced Due Diligence) in High-Risk Situations 

Stricter examination through Enhanced Due Diligence (EDD) is required in some situations, such as: 

Complex or high-value transactions that might point to possible fraud or money laundering. 

Transactions carried out through non-face-to-face channels, like online or phone banking, is one example.

Politically Exposed Persons (PEPs), especially foreign ones, are another.

High-risk cross-border wire transfers, particularly those involving countries with a reputation for having lax regulatory oversight, are another situation.

To reduce risks, EDD measures call for more paperwork, funding source confirmation, and continuous monitoring.

FATF Grey List and Philippines’ Status (2025)

As of 2025, the Philippines is still on FATF's grey list in spite of continuous regulatory efforts. The following are important areas that need improvement:

To lessen vulnerabilities in these industries, increased oversight of Designated Non-Financial Businesses and Professions (DNFBPs) was implemented to make sure they adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) laws. 

Financial authorities have real-time access to Beneficial Ownership (BO) data, which improves accountability and transparency.

Higher rates of prosecution and conviction in money laundering cases demonstrate a stronger legal system.

AML in the Fintech, Banking, and Crypto Industries

Banking Industry

There is growing pressure on traditional banks to improve sanctions screening and real-time monitoring systems. It is now common practice to reduce risks by combining advanced tools with frequent compliance training.

Digital banks and fintech 

Digital Know Your Customer, or eKYC, is used by cutting-edge financial institutions like neobanks and e-wallets to facilitate quicker onboarding without compromising security. Under its supervision, BSP makes sure these organisations implement safe onboarding procedures, such as automated transaction monitoring and liveness detection.

Virtual asset providers (VASPs) and cryptocurrency 

VASPs are subject to BSP Circular No. 1108 (2021), which requires them to put in place thorough AML/CFT procedures, such as STR reporting and licensing. Because of its potential for high risk, this expanding industry continues to be a focus for regulators.

Consequences of Non-Compliance in the Philippines 

There are serious penalties for breaking Philippine AML regulations, such as:

• Administrative fines of up to PHP 5 million (about $90,000) are levied against entities found to have broken anti-money laundering laws.
• Another repercussion is revocation of operating licenses, which essentially shuts down financial institutions' operations for noncompliance with regulatory bodies' guidelines. 
• Criminal penalties, such as up to seven years in prison for people or organisations engaged in major transgressions like aiding money laundering or funding terrorism.

To prevent future infractions and safeguard the integrity of the financial system, the Anti-Money Laundering Council (AMLC) publicly discloses non-compliant entities, identifying and shaming those that do not adhere to compliance standards.

Maintaining compliance is essential for preserving an organization's financial stability and reputation, in addition to preserving regulatory approval.

How May Sanction Scanner Help You?

Sanction Scanner offers all-inclusive solutions to guarantee smooth adherence to global laws and reduce the dangers of financial crimes. The platform's state-of-the-art technology allows organisations to identify high-risk individuals or entities through real-time sanction, PEP (Politically Exposed Person), and adverse media screening. It provides thorough audit reports for regulatory submissions and automates compliance workflows, lowering the possibility of human error. Sanction Scanner protects your company from possible legal and reputational risks by improving operational efficiency and adhering to international AML (Anti-Money Laundering) standards through configurable features catered to particular business needs.