MANILA, 2 March 2005 — Removal of the Philippines from the Financial Action Task Force (FATF) watchlist of suspected money launderers will not necessarily make sending money to the country easier, the central bank chief has said.

Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura, however, said the delisting “will make the remittance process less cumbersome” such that the cost of sending money to relatives in the Philippines will eventually go down.

“They (the banks) had to prepare so many forms (because) they were subjected to more frequent inspections and all of that. As a result of that they had to increase their charges significantly,” Buenaventura said.

Independent analyst Idelfonso Bagasao of the Economic Resource Center for Overseas Filipinos said “the effect is more on the rating of the Philippines with overseas investors” rather on the remittance process.

“The delisting is connected with our implementation of the Anti-Money Laundering Law (AMLA). The FATF felt we have not come up with an anti-money laundering law which is up to their criteria,” Bagasao, who studied the remittance process as a consultant with the Asia Development Bank (ADB), said.

He added that AMLA has had effects on remittance charges. Banks had to comply with this so they take a longer time to process remittances.

According to Bagasao, the additional time required meant incremental costs that banks passed onto remitters.

“Pero hindi pa naman naalis yung AMLA. (The delisting) is not going to reduce remittance charges,” Bagasao said. “Remittances will still be scrutinized both by the Philippine government and by sending countries.

Buenaventura, though, thinks otherwise. “In some countries the remittance offices were closed or new licenses were not given because we were in the blacklist. This will be facilitated now.”

“That is the greatest advantage of being delisted. It makes our remittances more manageable or more feasible,” Buenaventura said.

He explained that before some European banks even started canceling licenses or starting to close down offices. They were unwilling to give out new licenses.

Buenaventura said “at one time in Paris there was no remittance facility at all. The licenses of all banks there were canceled.

He said there was no official sanction for being on the FATF blacklist but that did not stop the different banks who felt it would be too cumbersome because the FATF scrutinized transactions to blacklisted places and asked for so much documentation, leaving the individual banks saying it was not worth it no.

“Never mind about the amount of money that we’re going to make on this if we will be sanctioned and penalized,” Buenaventura said.

Buenaventura hopes the removal of the country from the FATF’s list will further increase remittances, which hit a high of $8.5 billion in 2004, the highest ever recorded since 1970.

A BSP press release said that in the month of December alone, overseas Filipino worker (OFW) remittances surged by nearly 20 percent, or $867 million. This annual performance far exceeded the 6 percent growth projection for the year.

The better-than-expected inflow in remittances was largely on account of the higher deployment of Filipino workers for 2004. Preliminary figures from the Philippine Overseas Employment Administration (POEA) revealed that deployment of both land-based and sea-based workers rose by 2.7 percent and by 4.2 percent to 669,539 and 225,122, respectively.

The bulk of OFW remittances continue to come from the USA, Saudi Arabia, Italy, Japan, UK, Hong Kong, and the United Arab Emirates (UAE).