After being added on the Financial Action Task Force grey list, Philippine’s central bank – Bangko Sentral ng Pilipinas (BSP) has nudged its banks to take all necessary measures to combat terror financing. The country, which was removed from the terror financing watchdog’s blacklist in 2005, has now been put on the grey list last year.

A report by Business World said that the banks have been asked to “implement targeted financial sanctions (TFS) like asset freezing” to address the issue along with proliferation of weapons of mass destruction.

According to the report, Deputy Governor of the central bank Chuchi G. Fonacier through Memorandum No. M-2022-007 told its supervised financial institutions to implement TFS-related policies that are consistent and proportionate to their risk profile.

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“The methodology should be tailored fit according to the risk and context of the BSP-supervised financial institutions. The simpler the products, services and operations of the institution, the simpler the approach that can be used,” the central bank said.

It has also asked banks to regularly conduct screening of their customers “whenever there are changes to the sanctions list and designated persons.” Besides, the lenders have also been mandated to rigorously verify the names of the account holders and their country of residence.

Meanwhile, FATF also said that since 2020, both ISIL and Al Qaeda have increasingly turned to new payment technologies to raise, move and deploy funds. “As a result, the use of virtual assets by terrorists remains a risk. In addition, the risk emanating from expansion of affiliates of ISIL and Al Qaeda has been increasing over the past years,” the terror financing watchdog said.