MANILA, April 28 (PNA) — A National Risk Assessment (NRA) is currently being done by several government agencies to evaluate vulnerabilities and weaknesses in the Philippines’ money laundering and terrorist financing measures.
This was disclosed by Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco in his speech during the Financial Inclusion Summit 2016 held at the central bank office in Manila Thursday.
He explained that results of the NRA would enable authorities “to sharpen our focus in ensuring effective enforcement of international standards against money laundering and terrorist financing.”
The decision of countries to strengthen their money laundering and terrorism financial measures has resulted in de-risking among banks, which is the reason why some money transfer operators (MTOs) from the Philippines lost correspondence tie-up overseas.
Tetango said the de-risking strategy of some banks overseas was a business decision and had been on-going for some years now, and not merely a result of the latest money laundering case, which in turn is not helping improve the situation.
”Since the closures limit the players that can competitively operate in the remittance market, this has the potential to reverse the steady gains we have made in reducing remittance costs,” he said.
The central bank chief also said that de-risking might also result in increased reliance by Overseas Filipinos (OFs) to the informal sector in sending money to the Philippines.
”In the end, this may exact an even larger toll on the OFs and their families in terms of deprivation of access to safe and reliable financial services, “ he said.
Thus, Tetangco said that as early as 2014, the BSP has raised this concern with international institutions such as the Financial Action Task Force (FATF), Alliance for Financial Inclusion, the Global Partnership for Financial Inclusion of the G20, the United States Department of Treasury, The Financial Stability Board and the World Bank (WB).
Amidst the current situation, the central bank chief remains confident of the sustained rise of remittances to the Philippines and its large contribution to domestic output.
In an interview by reporters after his speech, the central bank chief said the slowdown of remittances in 2015 could not be attributed mainly to de-risking but also to other factors like strengthening of the US dollar against third currencies.
He pointed out that inflows from Filipinos abroad have continued to show resilience, as proven during the financial crisis in 2007-08 and during the sustained drop in oil prices.
”I think remittances will continue to be a significant source of foreign exchange for us and a significant source of funding for economic activities such as consumption investments and the list and boost the economy,” he added.
Central bank data show that cash remittances in the first two months this year reached USD 4.1 billion, higher than year-ago’s USD 3.9 billion.
Including in-kind remittances, personal remittances rose by 6.1 percent as of end-February this year.
Last February alone, cash remittances rose by 9.1 percent year-on-year to USD 2.11 billion while personal remittances went up by nine percent to USD 2.3 billion.
Contraction in remittances was registered in August, October, and November last year but for the whole year cash remittances rose by 4.6 percent year-on-year while personal remittances by 4.4 percent.
This year, the central bank’s remittance assumption is a growth of four percent.