Based on AMLC, FATF, and National Risk Assessment Findings

Money laundering is a long-standing problem in the Philippines, especially in industries that handle large volumes of cash, cross-border transactions, or complex corporate structures. Even though the Philippines officially exited the FATF Grey List in February 2025, the risk hasn’t disappeared—especially in sectors historically linked to illegal financial activity.

This article simplifies the findings of the Anti-Money Laundering Council (AMLC), the Financial Action Task Force (FATF), and national risk assessments to identify the top 10 business sectors in the Philippines most likely to be used for money laundering.

These industries are not inherently criminal, but they are high-risk and commonly exploited by criminals due to weak controls, anonymity, or large cash flows.

Top 10 High-Risk Business Sectors for Money Laundering in the Philippines

1. Casinos and Integrated Resorts

Casinos—especially those using junket operations—have long been flagged as high-risk due to:

• huge cash transactions
• cross-border money flows
• difficulty verifying the real source of funds

Famous Case:
The $81-million Bangladesh Bank Heist was laundered through Philippine casinos.

Even with tighter regulation today, the casino ecosystem remains one of the highest-risk money laundering channels in the country.

2. Real Estate Developers and Brokers

Real estate is a global favorite for hiding illegal money because:

• properties can store value
• buyers can use “dummies” or nominees
• large cash payments are possible

In the Philippines, cash transactions of ₱7.5M and above must be reported, but criminals still exploit weak identity verification and loopholes in beneficial ownership records.

3. Commercial and Universal Banks

Banks are the primary entry point for illicit money. Their risks come from:

• collusion between insiders and criminals
• fake or fictitious bank accounts
• poor transaction monitoring

Notable Incident:
RCBC was fined ₱1 billion for governance failures linked to the Bangladesh Bank Heist.
One branch manager was convicted on eight counts of money laundering.

4. Money Service Businesses (MSBs) and Remittance Centers

This includes:

• remittance centers
• pawnshops
• forex dealers
• money value transfer services (MVTS)

Why they’re high-risk:

• heavy use of cash
• easy to “split” large amounts into smaller transfers
• common channel for smuggling and drug-related funds

Unregistered or illegal remittance shops are especially dangerous because they operate outside AML controls.

5. Virtual Asset Service Providers (VASPs) / Crypto Exchanges

Crypto businesses are now heavily regulated by the BSP because they are:

• anonymous
• borderless
• frequently used in cybercrime

With cyber scams and online fraud rising, VASPs remain an emerging high-risk sector.

6. Company Service Providers (CSPs) / Corporate Formation Agents

These companies help people:

• set up corporations
• provide nominee directors
• offer virtual office addresses

Because they can hide the real owner behind layers of companies, CSPs are often misused for:

• shell companies
• tax evasion
• hiding the source of illicit funds

They are now classified as DNFBPs and must register with the AMLC.

7. Philippine Offshore Gaming Operators (POGOs)

Even before the government’s crackdown, POGOs were considered highly vulnerable to money laundering because:

• most payments were online
• players remained anonymous
• money moved through foreign accounts

Although POGOs are being phased out, illegal online gambling platforms still pose significant risk.

8. Lawyers and Accounting Professionals

These professionals become high-risk when they:

• manage client funds
• set up corporations
• handle major transactions
• buy/sell properties for clients

Because of professional secrecy, criminals may use them as gatekeepers to legitimize financial crimes.
However, attorney-client privilege cannot protect illegal transactions

9. Dealers in Precious Metals and Stones (Gold, Diamonds, Jewelry)

These businesses handle items that are:

• high value
• easy to move
• easy to hide

Criminals often use:

• over/under-invoicing
• fake trade documents
• bulk gold purchases

to hide or move large amounts of money.

10. Fake Investment Schemes, Scam Companies, and Illegal Lending

This includes:

• pyramid schemes
• unauthorized forex trading groups
• ponzi-style money doubling scams
• illegal lending operations (“5-6”)

These schemes generate huge amounts of dirty money that criminals later launder through:

• real estate
• banks
• shell companies
• casinos

Large-scale corruption in public infrastructure projects also falls under this category, as illegal kickbacks must be laundered through the financial system.

Why These Sectors Are High-Risk in the Philippines

The Philippines remains vulnerable due to:

• a largely cash-based economy
• widespread fraud and corruption
• high volumes of remittances
• complex cross-border transfers
• weak transparency in beneficial ownership
• increasing cybercrime

Although the country passed major reforms to exit the FATF Grey List, risk remains—especially in sectors with:

• weak enforcement
• anonymity
• large or frequent cash flows

How Businesses Can Protect Themselves

Here are AMLC-aligned best practices:

1. Verify Ultimate Beneficial Owners (UBO)

Do not rely only on documents or declarations.
Criminals often use:

• dummies
• shell companies
• nominee directors

2. Apply Enhanced Due Diligence (EDD)

Especially for:

• casinos
• MSBs
• real estate
• crypto exchanges
• foreign clients

3. Strengthen Employee Training

Many cases happen due to insider collusion.

4. Use Advanced Transaction Monitoring

Look for red flags such as:

• rapid cash-ins and cash-outs
• unusual foreign transfers
• structuring or “smurfing”

5. Follow Regulatory Requirements

Submit:

• CTRs (Cash Transaction Reports)
• STRs (Suspicious Transaction Reports)

on time and with accuracy.

Final Thoughts

While the Philippines has improved its anti-money laundering systems, several business sectors remain high-risk targets for criminals. Understanding these vulnerabilities helps companies, investors, and even ordinary Filipinos stay aware of the industries most often exploited for illegal financial activity.