Manila was facing a 15 March deadline before the 29 member states of the Paris-based Financial Action Task Force (FATF) would be allowed to slap tight restrictions on doing business with Filipino financial institutions.

But with less than 48 hours left before the "counter-measures" kicked in, the FATF announced that the new legislation was good enough to dodge sanctions - at least for the moment.

Non-cooperative territories Cook Islands Egypt Indonesia Burma Nauru Nigeria Philippines St Vincent & Grenadines Ukraine

That ensures that the $7.5bn a year that enters the Philippines from Filipinos working abroad, a mainstay of the country's economy, can keep flowing uninterrupted.

The Philippines remains on the FATF's blacklist of non-cooperative countries, nonetheless, and will stay there until it has proved the new laws work in practice as well as on paper.

Quick change

The country has been on the FATF's blacklist for a long time, thanks to the perception that it has been unwilling to make sure its financial regulators are really doing their job.

With the threat of sanctions hanging over its head since last year, President Gloria Arroyo put forward new laws which - for instance - cut the level at which transactions have to be reported.

But when they passed the new laws in February, just before the FATF's last plenary meeting, legislators upped the limit to about $75,000 instead of the $10,000 customary elsewhere and recommended by the FATF.

They also weakened the proposed rules by requiring a court order before suspect bank accounts can be investigated.

Only cases of kidnapping for ransom, drug trafficking and terrorism are exempt.

President Arroyo refused to sign the new legislation and demanded - and got - changes to keep the FATF satisfied.

Long haul

The FATF has been drawing up internationally-recognised guidelines for fighting dirty money since 1989.

The NCCT list is the centrepiece of its efforts, and has shrunk from two dozen names to just 10 over the past decade as countries have responded to the threat of having their financial system effectively frozen out of international finance by tightening up lax rules.

Since the tragedy of 11 September 2001, it also has responsibility for guiding international efforts to deal with the funding of terror.

The NCCT list could be in danger of disappearing, though.

The International Monetary Fund is keen to combine its work on financial regulation with that of the FATF.

But its developing world members say the NCCT list is discriminatory, accusing rich FATF members - especially the US and the UK - of forcing reforms on offshore jurisdictions which they refuse to countenance for their own banks.