When “Counter-Terrorism” Becomes a Weapon Against Civil Society

by Dom Ybera

September 15, 2026

When “Counter-Terrorism” Becomes a Weapon Against Civil Society: FATF, Financing Laws, and New Legal Threats in the Philippines

This article traces how an international financial-compliance regime became a domestic tool of repression in the Philippines, and how new legislation pushed through Congress threatens to expand that tool considerably.

A Community Organization Frozen Out
For years, the Leyte Center for Development (LCDe), a multi-awarded Philippine NGO, ran humanitarian and community programs in one of the country’s poorest regions. Then its bank accounts were frozen. No conviction. No proven link to any violent act. Just the weight of a terrorism-financing accusation, made possible by laws the Philippine government adopted, in large part, to satisfy an international body most of LCDe’s community partners had never heard of: the Financial Action Task Force, (FATF).1

LCDe is not alone. A joint investigation by the National Union of People’s Lawyers (NUPL) and the Council for People’s Development and Governance (CPDG) found that terrorism-financing cases in the Philippines rose almost five-fold in a single year, from 14 in 2023 to 66 in 2024. This spike occurred as the government raced to meet international financial standards. The targets were not armed groups. They were civil society organizations, community journalists, religious groups, and human rights defenders—accused on the basis of broad, loosely defined laws, sometimes with the help of witnesses later found to have been coerced into giving false testimony.2

The FATF Backdrop: How “Compliance” Built a Crackdown Machine
FATF is a G7-founded international body that sets global standards against money laundering and terrorism financing.3 While it lacks legal authority to sanction non-compliant states directly, but its “grey list” and “black list” carry real reputational and financial weight. Countries fear reduced investor confidence, higher borrowing costs, and restricted banking access. Consequently, the Philippines spent nearly 25 years cycling through FATF’s watchlists after landing on its blacklist in 2000 for lacking an anti-money-laundering framework.

Each time, the government responded by passing a new law and prosecuting. The Anti-Money Laundering Act, the Terrorism Financing Prevention and Suppression Act (RA 10168), and the Anti-Terrorism Act of 2020 (RA 11479) were all framed publicly as compliance with global standards.4 In February 2025, following a year-long push under the Marcos Jr. administration codenamed “Project Exit Grey List,” the Philippines was finally removed from the grey list.5

However, civil society paid the price for this removal. The NUPL-CPDG report revealed that RA 11479 and RA 10168 contain broad, vague definitions that fail to distinguish legitimate humanitarian and development work from actual terrorist financing.6 Paralegal services. Financial assistance for basic needs. Community organizing. All of it became vulnerable to being reclassified, on the government’s terms, as material support for terrorism.

Furthermore, the economic rationale for this urgency falls short under scrutiny. The Philippines maintained record remittances and foreign investment while on FATF’s lists, mirroring countries like the United Arab Emirates and Panama, which saw minimal disruption during their own grey-list periods.7 The supposed “grave economic consequences” of grey-listing remain largely hypothetical. What is proven is that the government used FATF compliance as political cover to construct a “crackdown machine,” using terror-financing laws against critics rather than actual financial criminals.

The New Front: Bills that Widen the Net
Exiting the grey list did not end the crackdown. Instead, Philippine lawmakers are moving several bills through Congress in 2025 and 2026 to permanently expand the surveillance, financial-restriction, and speech-control powers built during the FATF push.

The Foreign Influence and Interference Act (FIIA): A consolidated set of House bills (HB 1068, 3218, 4214, 4887, 4890, 7200, and 9195) grants the state broad new powers over any organization receiving foreign support.8 CPDG and NUPL, present as observers at a House Technical Working Group hearing in August 2026, have flagged four core dangers:

  1. The definitions of “foreign interference” and “foreign direction” are vague enough to invite arbitrary interpretation and violate constitutional overbreadth standards.
  2. The bill permits administrative content-blocking and website takedowns without prior judicial review, directly undermining freedom of expression, press freedom, and the public’s right to information.
  3. It enables extrajudicial account freezing and expanded surveillance, replicating repressive frameworks already used against development actors and human rights defenders.
  4. Restrictive registration schemes and the stigmatization of foreign-funded programs will chill international solidarity partnerships that serve marginalized communities. CPDG and NUPL argue that genuine national sovereignty targets foreign aggression and predatory economic practices, not local organizations doing pro-people development work.

The Anti-Disinformation Bill (HB 9465): Championed by Sandro Marcos, this consolidated measure passed its third and final reading in the House and now awaits Senate action.9 It holds priority status under the Legislative-Executive Development Advisory Council (LEDAC), giving it strong momentum. The measure gives the government sweeping discretion to decide what constitutes “truth” and “falsehood.” Applied to independent journalism, fact-checking, and dissenting political speech, this risks becoming censorship disguised as a public information safeguard. Civil society groups like SIGLA Research Center and the Center for Media Freedom and Responsibility (CMFR) raised these exact warnings.10 Their concerns echo long-standing positions by the National Union of Journalists of the Philippines (NUJP), which has urged lawmakers to invest instead in fact-checking capacity and media literacy rather than criminalizing vaguely defined “falsehoods.”11 Meanwhile, CPDG has publicly urged lawmakers to instead prioritize protective legislation, such as the long-stalled Human Rights Defenders Protection Act (HB 214).

The Terror Grooming Prevention Act (SB 1366) and its House Counterparts: Introduced by Senator Ronald “Bato” dela Rosa, alongside companion House bills from Representatives Romeo Acop, Alexander Pimentel, and Robert Nazal, this bill criminalizes “terror grooming,”12 defined as building a “psychological, ideological, or emotional bond” to facilitate terrorism involvement. While intended to target recruitment networks, its language is broad enough to catch mentorship, religious instruction, political education, and community organizing—the ordinary work of civil society, unions, and teachers. The bill’s operational mechanics compound these risks:

  • Workers’ and people’s organizations must run internal “counter-radicalization” programs or face deregistration and, for community groups, a barangay-imposed ban.
  • Internet intermediaries and cafes face 24-hour takedown and reporting obligations with no court order required.
  • A national database would collect the names and affiliations of anyone flagged “at risk,” without clear qualifying rules.

Penalties reach up to 40 years in prison and a ₱10 million fine. Human rights lawyers argue this violates multiple constitutional protections—from freedom of expression and religion to due process—while failing the Philippine Supreme Court’s standard that advocacy of an idea cannot be criminalized unless it is directed at, and likely to produce, imminent lawless action.

The New Espionage Act: A fourth measure, consolidating ten separate House bills, would replace the Philippines’ 85-year-old espionage law with a sweeping new framework.13 As of 26 August 2026, the bill is on second reading in the House of Representatives. The bill broadens espionage to cover any unauthorized “dealing” with a “classified matter” (a term defined widely enough to include receiving, possessing, recording, or disclosing such information) committed “in time of war or peace,” through “physical, electronic, cyber, or any other means.” It separately criminalizes accessing a sketch, map, or “graphical or multimedia representation” of a prohibited place or piece of critical infrastructure, and makes unauthorized possession of surveillance or mapping equipment (cameras, drones, tracking devices) a standalone offense punishable by up to 12 years in prison. Conspiracy and even the mere proposal to commit espionage are separately punishable, with conspiracy carrying the same life sentence as the underlying offense. The bill also empowers the Anti-Money Laundering Council (AMLC) to investigate, freeze, and forfeit assets connected to any of these offenses, and allows military and law enforcement personnel to wiretap and intercept the communications of anyone merely suspected of committing them.

None of this is aimed, on its face, at civil society. But its mechanics echo the same pattern as the FIIA, the Anti-Disinformation Bill, and the Terror Grooming Prevention Act: broad, undefined terms (“classified matter,” “national defense assets,” “critical infrastructure”) that leave officials enormous discretion to decide who counts as a spy; account-freezing powers modeled directly on the terrorism-financing framework already used against groups like LCDe; and a possession offense broad enough to sweep in journalists, environmental monitors, and human rights documenters who photograph, map, or film sites the state later designates sensitive. Introduced while the Anti-Disinformation Bill was clearing the House, the New Espionage Act adds a fourth track to the same expanding net: where FIIA targets foreign funding, the Anti-Disinformation Bill targets speech, and the Terror Grooming Prevention Act targets mentorship, the New Espionage Act targets information itself—its possession, its transmission, and increasingly, its mere documentation.

One Escalating Pattern, Not Four Separate Bills
Read together, these measures form a single trajectory that began with FATF compliance. The goal remains consistent: expand the definition of a security threat, lower the evidentiary bar for state action, and equip enforcement agencies (police, financial regulators, internet providers, even private citizens) to act on suspicion rather than proof.

The 2025-2028 National Action Plan for Unity, Peace, and Development (NAP-UPD),14 the government’s counter-insurgency blueprint, sits at the center of this strategy. It succeeds previous plans (Oplan Bayanihan and Oplan Kapayapaan) that were heavily criticized for treating community organizing as a security threat. The National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) remains the lead implementer, despite years of calls from UN Special Rapporteurs and Philippine rights groups to abolish it.15 FIIA, the Anti-Disinformation Bill, the Terror Grooming bill, and the New Espionage Act simply add a broader, more automated, and digitally enabled version of the same logic. The state no longer needs an active insurgency case to act—only a flagged online post, an unregistered organization, or a “concerning” pattern of mentorship.

Voices from the Ground
This is not an abstract legal debate for the affected organizations. At an August 2025 roundtable convened by the Defend NGOs Alliance in Eastern Visayas, humanitarian workers and community NGOs described directly how terrorism-financing laws are already being misused against them through frozen accounts, canceled partnerships, and donors quietly pulling out.16 Media organizations at the same gathering shared their own experiences with surveillance and red-tagging, discovering how closely their situation mirrored that of the NGOs. What emerged was a shared strategy to raise public awareness about shrinking civic space before it disappears entirely.

This environment produces quiet, cumulative harm even without formal convictions. Organizations self-censor their trainings and publications. Community partners (including Indigenous leaders, farmers’ and fisherfolk associations, and youth group) distance themselves to avoid being tagged. Donors grow cautious, and crucial human rights documentation examining root causes of conflict or state abuse becomes something staff hesitate to publish.

Resistance and the Case for International Solidarity
This escalation has not gone unanswered. Members of the Defend NGOs Alliance have been lobbying Congress against these measures even before the alliance’s formation in December 2024. CPDG and NUPL’s presence at a House hearing, their report exposing the surge in terror-financing prosecutions, and their media campaigns form part of this sustained, coordinated pushback. They maintain that national security and human rights are mutually reinforcing, and that genuine sovereignty means confronting outside aggression and exploitative economic practices, not punishing local development groups.

International solidarity holds concrete leverage here. FATF wields enormous influence through financial and diplomatic pressure. Consequently, it can also be pushed by member states and international civil society to account for how its “Recommendation 8” guidance on non-profits has been weaponized in the Philippines.17 Organizations abroad can also lend weight by publicizing cases like LCDe’s, supporting CSOs facing donor “de-risking,” and pressing their own governments and financial institutions not to treat an FATF designation as automatic verdict on an organization’s legitimacy.

Finally, the Philippines’ experience serves as a warning for civil society worldwide. FATF-style compliance pressure is not unique to one country, and the legislative playbook—vague definitions, extrajudicial takedowns, compelled “counter-radicalization” programming, and warrantless account freezes—is easily exportable. Recognizing how it took root here is essential to spotting and resisting its arrival elsewhere. #

  1. Pia Ranada, “EXCLUSIVE: Gov’t slaps terrorist designation, freezes funds of award-winning development NGO, officers,” Rappler, June 5, 2024, https://www.rappler.com/philippines/visayas/government-slaps-terrorist-designation-freezes-funds-development-ngo-officers-leyte/; charges later dismissed for insufficient evidence, see “No evidence: Prosecutor junks financing terrorism charges vs Tacloban NGO,” Bulatlat, January 29, 2025. ↩︎
  2. National Union of People’s Lawyers and Council for People’s Development and Governance, Playbook of Repression: Civil Society Report on the Misuse and Abuse of Combating Terrorism Financing Laws Against Civil Society Organizations, February 2025, https://cpdg.ph/wp-content/uploads/2025/02/NUPL-CPDG-Playbook-of-Repression-Final.pdf ↩︎
  3. IBON Foundation, “PH exits FATF grey list: What now?” August 13, 2025, https://www.ibon.org/ph-exits-fatf-grey-list-what-now/ (also republished by CPDG). ↩︎
  4. See note 3, above; and Playbook of Repression, note 2, above, on RA 10168 and RA 11479. ↩︎
  5. “Filipino activists, NGOs targeted in terrorism financing charges to ‘meet int’l task force quota,’ says lawyers group,” LiCAS.news, January 21, 2025, https://www.licas.news/2025/01/21/filipino-activists-ngos-targeted-in-terrorism-financing-charges-to-meet-intl-task-force-quota-says-lawyers-group/; grey-list removal confirmed in “Philippines Removed; Laos and Nepal Added: FATF Grey List February 2025 Update,” AML UAE, February 21, 2025. ↩︎
  6. Playbook of Repression, note 2, above. ↩︎
  7. IBON Foundation, note 3, above. ↩︎
  8. House Bill No. 1068, 20th Congress, introduced by Rep. Maria Rachel J. Arenas, https://docs.congress.hrep.online/legisdocs/basic_20/HB01068.pdf ↩︎
  9. “House approves anti-disinformation bill on final reading,” Philippine News Agency, June 3, 2026, https://www.pna.gov.ph/articles/1276527; Michael Punongbayan, “Advocates call to junk Marcos anti-disinfo bill with echoes of Anti-Terror Law,” Philstar, July 25, 2026. ↩︎
  10. “How the anti-disinformation bill poses a danger to press freedom in the Philippines,” originally published by the Center for Media Freedom and Responsibility, republished by IFEX, August 7, 2026, https://ifex.org/how-the-anti-disinformation-bill-poses-a-danger-to-press-freedom-in-the-philippines/ ↩︎
  11. National Union of Journalists of the Philippines, position paper on Senate Resolution No. 191, cited in “NUJP: Laws vs fake news can be used for censorship,” Philippine Daily Inquirer, November 29, 2022; CPDG, “Sandro Marcos’ Anti-Disinformation Bill: A Road to More Censorship and Impunity,” May 26, 2026, https://cpdg.ph/sandro-marcos-anti-disinformation-bill-a-road-to-more-censorship-and-impunity/ ↩︎
  12. Senate Bill No. 1366, 20th Congress, “The Terror Grooming Prevention Act,” introduced by Sen. Ronald “Bato” dela Rosa, https://web.senate.gov.ph/lisdata/4805044087!.pdf; KARAPATAN statement cited in “Philippines,” ICNL Civic Freedom Monitor, September 2025. ↩︎
  13. House of Representatives, 20th Congress, Committee Report substituting House Bills 812, 1457, 1844, 2793, 3023, 4202, 4886, 6177, 6183, and 7201, “An Act Expanding the Coverage of Espionage Law” (“New Espionage Act”), approved June 2, 2026, https://docs.congress.hrep.online/legisdocs/first_20/CR00435.pdf ↩︎
  14. Memorandum Circular No. 83, s. 2025, “Adopting the National Action Plan for Unity, Peace, and Development 2025-2028,” signed May 2, 2025; National Union of People’s Lawyers, “On the National Action Plan for Unity, Peace and Development (NAP-UPD): doubling down on a failed policy of repression,” May 10, 2025, https://nupl.net/on-the-national-action-plan-for-unity-peace-and-development-nap-upd-doubling-down-on-a-failed-policy-of-repression/ ↩︎
  15. “UN Special Rapporteur Khan calls for abolition of NTF-ELCAC,” GMA News Online, February 2, 2024, https://www.gmanetwork.com/news/topstories/nation/896225/un-special-rapporteur-calls-for-abolition-of-ntf-elcac/story/; “‘Disband NTF-ELCAC,’ UN special rapporteur urges PH gov’t,” Rappler, November 15, 2023 (Special Rapporteur Ian Fry). ↩︎
  16. Council for People’s Development and Governance, roundtable discussion held with the Defend NGOs Alliance, Eastern Visayas, August 30, 2025, https://cpdg.ph/featured-events-roundtable-discussion-on-civic-spaces/ ↩︎
  17. Human Rights Watch, “Philippines: Terrorism-Financing Charges Abused,” February 12, 2025, https://www.hrw.org/news/2025/02/12/philippines-terrorism-financing-charges-abused (on FATF’s October 2023 revision of Recommendation 8). ↩︎