BSP Deputy Governor Nestor A. Espenilla Jr.
On the sidelines of the Financial Stability Board’s (FSB) Regional Consultative Growth for Asia (RCGA) meeting in this resort island of Bohol province, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. said the two foreign banks have submitted their applications to operate in the local market.
He, however, declined to identify these financial institutions since their applications are now being assessed.
He said five more Asian-based banks have indicated their intention to operate in the country while a few banks outside of the region have also inquired about operation in the domestic economy.
Operation of financial institutions in the country have been fully liberalized after last July's signing of Republic Act 10641 or the Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines.
Before the signing of the amendment law covering foreign banks’ operation in the Philippines, foreign financial institutions can only own up to 60 percent of a domestic bank.
BSP Governor Amando Tetangco Jr. earlier said approval of the said law will enable banking institutions, not only in the country but in the region, to be better equipped in line with the looming regional integration.
With the regional integration preparations, monetary officials said competition will increase although they admit that this is also true for bank consolidations.
Tetangco said domestic banks’ decision to tie up with each other will help them face the challenges of higher foreign direct investments (FDIs) vis-à-vis the regionalization.
He said this would also enhance technology and human resource skills transfer.
”The liberalization of the banking system is part of the reform agenda on capital and financial market development that is designed to create an efficient working environment where the needs of savers and users of funds could be addressed, with the larger view of our pursuit of financial stability,” he added.
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