Philippine authorities are filing baseless terrorism-financing charges against civil society groups and activists, apparently to be removed from the "grey list" of a global terrorism financing and money laundering watchdog, Human Rights Watch said today. The Financial Action Task Force (FATF) visited the Philippines in January 2025 to determine whether the country can be removed from the organization's list of countries subject to increased monitoring.
Philippine authorities have been exploiting the organization's grey-listing to harass organizations and activists in a surge of terrorism financing cases. Many charges have been based on scant evidence that the courts have dismissed. The authorities appear to be increasing prosecutions so that the task force would remove the Philippines from its grey list, while disregarding its guidance that aims to protect nonprofit organizations. Being grey-listed could mean, among other impacts, difficulty in accessing international financial markets and reputational damage for the Philippines.
"Philippine authorities appear to be stepping up terrorism financing prosecutions to get off of FATF's 'grey list' and its potential financial cost," said Bryony Lau, deputy Asia director at Human Rights Watch. "This seems to be the government's latest bad reason to bring baseless charges against civil society groups and activists in violation of their rights."
The Financial Action Task Force, an intergovernmental body established in 1989, works with regional bodies and member countries to tackle money laundering, terrorist financing, and other threats to the global financial system through monitoring and by issuing recommendations. The Philippines is a member of the Asia/Pacific Group on Money Laundering, an associate member of FATF that reviews compliance with the recommendations in the region.
The organization's Recommendation 8 on nonprofit organizations requires national authorities to take a "risk-based approach" to address nonprofit organizations potentially being abused for terrorism financing. In October 2023, FATF revised the recommendation, acknowledging that "misapplication and misinterpretation … had led countries to apply disproportionate measures" to nonprofits.
In 2021, FATF put the Philippines on its "grey list" for deficiencies in its money laundering and terrorism financing measures. To be removed from the "grey list," Philippine authorities need to implement an action plan of key reforms. Among the eight areas for reform are demonstrating an increase in terrorism financing cases and taking appropriate measures regarding nonprofits without harming legitimate activity. At its October 2024 plenary, the task force determined that the Philippine government had made sufficient progress for an "on-site assessment," which occurred in January.
The Philippines in 2012 enacted a law on terrorism financing, the Terrorism Financing and Prevention and Suppression Act. However, the Asia/Pacific Group in a 2019 report found that despite the law, Philippine authorities had not prosecuted anyone for financing terrorism.
In 2020, congress passed the Anti-Terrorism Act, which has an overbroad definition of terrorism and granted expansive executive powers to the governmental Anti-Terrorism Council to designate organizations and individuals as terrorists. The council can in turn recommend that the Anti-Money Laundering Council should freeze bank accounts.
Following grey-listing by FAFT in 2021, the Philippine government ramped-up its filing of terrorism financing cases. The 2023-2027 national strategy on money laundering and terrorism financing prioritized increasing capacity to investigate and prosecute terrorism financing. Philippine government officials saidthese steps could take the country off the "grey list" by early 2025.
The Philippine government has successfully prosecuted some terrorism financing cases. In 2024, courts convicted individuals allegedly linked to violent extremist groups in the southern Philippines.
Most other terrorism financing cases, however, appear to have involved individuals and organizations that the Philippine government accuses of having links to the Communist Party of the Philippines and its armed wing, the New People's Army. Those charged include workers and activists with civil society groups, clergy, and journalists.
Many of these cases suggest that Philippine authorities are relying on accounts from alleged former rebels; the same flimsy evidence that the military and the police have long used in politically motivated prosecutions of leftist human rights, environmental, and Indigenous activists, religious workers, journalists, and others.
For decades, successive Philippine administrations have used "red-tagging" - accusing people of being members or sympathizers of the communist insurgency - as part of its counter-insurgency campaign, violating their basic rights and putting them at risk of physical harm. Individuals recently charged with terrorism financing told Human Rights Watch that the authorities had previously subjected them to red-tagging, surveillance, and online harassment.
The National Union of Peoples' Lawyers, which often represents red-tagging victims, has accused the Philippine Justice Department of "weaponization of terror laws to unjustly target activists and civil society organizations" to satisfy FATF's requirements. In August 2024, United Nations human rights experts expressed alarm over the targeting of civil society organizations and activists, reiterating that "any rights limitations in the name of the fight against terrorism and the financing of terrorism must meet the objective criteria of proportionality, necessity, legality and non-discrimination under international law."
In May 2024, the Justice Department filed terrorism financing charges against the Community Empowerment and Resource Network (Cernet), a humanitarian group based in Cebu province, and 27 staff members. The Anti-Money Laundering Council froze their bank accounts. A Cernet employee said the case was based entirely on a single allegation that the group had given cash to the New People's Army in 2012.
In October 2024, police filed terrorism financing charges against three officials from Kaduami, a humanitarian group that has worked with farmers and fisherfolk in the northern Philippines for over 40 years. Kaduami filed complaints that the charges were spurred by the government's efforts to exit FATF's grey list.
In January, police arrested two community workers from Paghidaet sa Kauswagan Development Group (PDG) in the Negros region in the central Philippines on terrorism financing charges. Amnesty International reported that the charges were based on the testimony of one witness, a former Communist Party member.
Philippine courts have convicted someindividuals for allegedly financing the communist movement, but judges have dismissed many other terrorism financing cases against organizations and activists for lack of probable cause. Courts recently cleared of terrorism financing charges the activists Fritz Labiano and Paul Tagle in Quezon province, and Jazmin Jerusalem, the executive director of the Leyte Center for Development.
Filing baseless terrorism financing charges and freezing assets have disrupted legitimate activities of civil society groups, Human Rights Watch said. Cernet was forced to cease operations and was eventually dissolved. Kaduami officials expect their bank accounts to be frozen at any time.
FATF and its regional member countries - especially those such as Australia, which provides technical assistance to the Philippines on terrorism financing - should ensure that measures targeting civil society are proportionate to identified risks. The task force's Recommendation 8 states that national authorities should engage with nonprofits in managing terrorism financing risks. Philippine activists told Human Rights Watch that neither FATF nor the government had ever engaged with or consulted them, including in risk assessments of the nonprofit sector.
"FATF should not stay silent while the government is misusing its terrorism financing recommendations to harass civil society groups and activists," Lau said. "The task force has genuine concerns about terrorism financing in the Philippines, and it should urge the government to address these issues while respecting international human rights law."
