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Part of the supervisory framework to prevent money laundering is the conduct of a risk assessment. The AMLC has conducted three risk assessments related to POGOs. First is the National Risk Assessment in 2017, and the next two are sectoral risk assessments. The first sectoral assessment is the financial impact through the financial flow analysis, and the second is the anti-money laundering/counter-terrorism financing (AML/CTF) risk brought about by POGOs.
In regard to the first, based on our records, the total flow of funds is approximately PhP54 billion only, combining inflows and outflows. If we deduct outflows from inflows, the net inflow is only approximately PhP7 billion. Comparing this to our PhP18.6 trillion economy, the PhP54 billion represents only 0.29%, and if we use the net inflow of PhP7 billion, this represents only 0.04% of the economy.
As for the second sectoral risk assessment, our findings revealed a low level of AML/CTF awareness and regulation; an increasing level of threat to money laundering and other fraudulent activities; a high number of unregulated or unsupervised service providers (SPs); and a low level of beneficial ownership identification.
Thus, our recommendations include increasing the level of AML/CTF effectiveness of compliance and supervision through training and workshops; revisiting supervision of Internet-based casinos and SPs, conducting a regulatory assessment, and enforcing actions; and reevaluating licenses of Internet-based casino operators and certificates of authority/operation issued to SPs. Part of the recommendations is to include SPs as covered persons within the company service provider sector definition under the Anti-Money Laundering Act of 2001, as amended. So we intend to finish inspecting all POGOs and SPs within the month. We will also apply different frameworks for POGOs and SPs. For POGOs, we will apply the Casino Implementing Rules and Regulations, whereas for SPs, we will apply the AML/CTF guidelines issued for other covered persons.—Atty. Mel Georgie B. Racela, Executive Director of the AMLC Secretariat, during the Senate Committee on Labor Hearing chaired by Senator Joel Villanueva on 11 February 2020