IMF Worries Philippines Casinos at Risk of Money Laundering

International Monetary Fund (IMF)

The International Monetary Fund is calling for additional supervision for anti-money laundering protocols in the Philippines. 

Casinos are often subject to money laundering concerns due to the amount of money flowing through the facility. You have players hitting the slot machines and table games, plus high limits areas, so it is a must that casinos keep up to date with anti-money laundering protocols. In the Philippines, the International Monetary Fund (IMF) feels that the casinos are still are at risk of being used to launder funds. A recent report showed that the venues are highly susceptible to such activity and changes need to be made to stop such activity from taking place.

The Findings

The IMF recently completed a Financial System Stability Assessment in the Philippines. The institution found that the government of the Philippines along with the expanding gaming industry need to do more to ensure that money laundering does not take place inside the casino facilities. According to the IMF, there is insufficient supervision within the industry as well as proper monitoring of transactions taking place inside the casino.

A recommendation was provided by the IMF, with a suggestion to approve legislative amendments as soon as possible to give the Central Bank of the Philippines, as well as the Philippine Insurance Commission and the US Securities and Exchange Commission direct access to information involving every individual depositor.

The IMF is a group based in Washington, D.C. and was created in 1945. There are 190 member countries connected to the group. The goal of the IMF is to promote global monetary cooperation as well as secure financial stability and help with international trade among members, along with promoting high employment rates and sustainable economic growth.

Regulatory Changes Are Needed

The IMF also wants to see regulatory changes in the Philippines. The group is calling on the Philippine Amusement and Gaming Corporation (PAGCOR), the country’s gaming regulator and operator, to supervise the gaming venues better.

The group also wants PAGCOR to supervise VIP touring groups that bring high rollers from China to Manila for gaming. PAGCOR needs to apply risk mitigation according to IMF as well as complete risk-based supervision tactics. They need to target junket operators and make sure the money laundering is not taking place in the country within the gaming venues.

Taking their recommendations one step further, IMF stated that PAGCOR needs to sell its casino and then operate in a regulatory manner only. Officials of IMF feel that PAGCOR faces a conflict of interest by owning casinos and operating as the industry regulator.

While a good portion of the report was negative, there were positives mentioned. The IMF commented positively on the lawmakers of the Philippines and pointed out how the country amended which businesses fall under the protocols concerning anti-money laundering.

At the beginning of 2021, amendments were passed by the lawmakers that placed Philippine Offshore Gaming Operators under the regulations connected to anti-money laundering. In the past, it was just the casinos that were subject to such regulations.

With this change, the Anti-Money Laundering Council has regulatory authority over these operators and if they stay in compliance with the Anti-Money Laundering Act in the country. The IMF recommended further that the supervisors within the Anti-Money Laundering/Combating the Financing of Terrorism sector need to continue to build on their supervisory role and ensure that entities understand the risks associated with the activity.

While this report was issued, there are still casinos in the Philippines that are shut down. In Manila, four IR casinos are closed and will remain shut down through April. An increase in positive COVID-19 cases resulted in the closure.

Quarantine measures in the region are being loosened as we speak, but the casinos will remain out of the loop due to risk of infection.

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