The need for an effective anti-money laundering regime is crucial and pressing for at
least two sets of reasons:
(i) Money laundering activities have their origins in graft, corruption, and other forms
of criminal activity.4 These activities undermine the Government’s legitimacy as
well as investor confidence. The development of an effective anti-money
laundering regime is fundamental to strengthening market governance and
investor confidence. It is likewise fundamental to supporting a broad range of
reforms in the context of ADB’s core policies on governance and anticorruption,
and the 2002-2004 Country Strategy and Program Update specifically promotes
good governance through “improving transparency…and tackling corruption.”
(ii) The Philippines has been included in the Financial Action Task Force on Money
Laundering’s (FATF)5 list of noncooperative countries and territories (NCCTs),
and it needs to substantially comply with FATF recommendations to avoid
countermeasures. The countermeasures would significantly impede the ability of
financial institutions located in the Philippines and of Philippine financial
institutions located abroad to conduct international transactions. Imposition of
countermeasures would have a disastrous impact on the country’s economic
recovery.
