Failure to pass the anti-terror bill into law will result in the “gray-listing” of the Philippines and put at risk the government’s ambitious goal of attaining an “A” credit rating, the Anti-Money Laundering Council (AMLC) warned over the weekend.
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The so-called “gray list” includes those countries with deficiencies in terms of compliance with international anti-money laundering framework.
The Philippines was placed under a 12-month observation period by the Financial Action Task Force (FAF) in October 2019, following the adoption of the country’s mutual evaluation report (MER). In view of the general pause in the International Cooperation Review Group review process due to the COVID-19 pandemic, the Philippines observation period will now end in February 2021, instead of October 2020.
“The observation period is the last opportunity for the Philippine competent authorities to address identified deficiencies in the MER to avoid gray-listing,” AMLC said in a report.
Among these deficiencies are the gaps in the Human Security Act and the Anti-Money Laundering Act of 2001, as amended. “So passing amendments to both the HSA and AMLA, as amended, is among the conditions to avoid the country’s inclusion in the gray list,” AMLC said.
“If any or all of the proposed amendments are not passed and not implemented within the observation period, the country will be included in the FATF gray list, which will publicly identify the Philippines as a risk to the international financial system for having strategic deficiencies in its AML/CTF [counter-terrorism financing] framework,” it said.
This will result in an additional layer of scrutiny from regulators and financial institutions, thereby increasing the cost of doing business and delaying the processing of transactions.
AMLC further said inclusion in the gray list will block “the country’s road to an ‘A’ credit rating from major global credit rating agencies such as Moody’s Investors Service, Fitch Ratings and S&P Global Rating.”
Last year, S&P raised the Philippines' rating for long-term sovereign credit to “BBB+” from “BBB” with a stable outlook, citing the country’s above-average economic growth, a healthy external position, and sustainable public finances.
The upgrade put the Philippines at par with Mexico, Peru, Thailand, and Trinidad and Tobago. Also, it is higher than the “BBB” ratings of Italy, Portugal, Hungary, Panama and Uruguay. The rating was a notch away from the most-coveted “A” rating category.
On June 11, 2020, the Tokyo-based Japan Credit Rating Agency upgraded the Philippines credit rating by a notch from “BBB+” to “A-”, citing the country’s resilience amid the pandemic.
AMLC said the COVID-19 pandemic has already adversely affected the economy and it would be prudent to mitigate other risks and avoid problems gray-listing would bring to the economy.
But the council said it would not be enough to just pass these amendments into law, since the Philippines was being assessed both on technical and effectiveness compliance.
“The country must also demonstrate effective implementation of these amendments before the observation period ends in February 2021…,” it said.
Former police chief and now Senator Ronald dela Rosa, meanwhile, warned critics of the anti-terrorism bill about the consequences of not passing it into law.
“You want the bill junked? Then have it junked. But don’t blame the government for not acting to curb terrorism once you become a victim of terrorism or if a loved one is killed due to to terorism," he said.
"You want another Marawi siege? You want another Zamboanga siege? Go ahead. You want to have bombings left and right? Go ahead junk this bill, just don’t blame the government if terrorism worsens in the country," he said.
The Commission on Human Rights previously criticized the vague definition of terrorism in the bill, which could allow authorities to tag criticism as inciting to terrorist acts.
Another advocate of the bill, Senator Panfilo Lacson, said he would be “eagle-eyed and vigilant” about any abuses to the law.
Lacson also countered criticism that the Anti-Terrorism Council that the law would create has the power to order suspected terrorists, since it will have no judicial or quasi-judicial authority.
"Those who have doubts on the extent of the ATC authority, please find time to read Section 45 of the bill, particularly the last paragraph, 'Nowhere herein shall be interpreted to empower the ATC to exercise any judicial or quasi-judicial power or authority,'" he said.
Also on Sunday, Deputy Speaker and Basilan Rep. Mujiv Hataman condemned the warrantless arrests of two Muslim traders in San Andres, Manila, and the allegedly illegal search on their residence without a court order validating the police operation.
Hataman called on the leadership of the Philippine National Police to probe this incident, as there seems to be mounting evidence to suggest that law enforcers, in this case, went beyond their authority and abused their powers.
Hataman, who voted no to the anti-terrorism bill, said it would give law enforcers too much power that could be abused. He said if police could not follow the right process in a simple drug bust, what more would they do if the anti-terror bill were passed and allowed them to make warrantless arrests and to detain suspects for 24 days without charges.
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