More rural banks closing this year

BSP encouraging mergers, consolidations

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has already closed 15 banks so far this year, exceeding the number of closures made a year ago as it tightened its lid over financial institutions.

The BSP’s Monetary Board has issued Resolution 1464, prohibiting the Rural Bank of Claveria (Cagayan) from doing business in the Philippines pursuant to Sec. 30 of Republic Act 7653 or The New Central Bank Act. 

The closed rural bank was placed under the supervision of the state-run Philippine Deposit Insurance Corp. (PDIC). 

The Monetary Board earlier issued Resolution 1317 last July 28 prohibiting the Rural Bank of Cabadbaran (Agusan) Inc. from doing business in the Philippines. 

The BSP has also ordered the closure of the Rural Bank of Alabat (Quezon), Rural Bank of Cabadbaran (Agusan), Rural Bank of Siaton  (Negros Oriental), New Rural Bank of Binalbagan (Negros Occidental), Comsavings Bank with trade name GSIS Family Bank, Rural Bank of Amadeo (Cavite), Surigao City Evergreen Rural Bank, Rural Bank of Malinao (Aklan), Koronadal Rural Bank Inc., Rural Bank of Panay, Rural Bank of Basay (Negros Oriental), Rural Bank of Bayawan (Negros Oriental), Lapu-Lapu Rural Bank, and Rural Bank of Villaviciosa (Abra) Inc.  

The BSP is looking at consolidating the Strengthening Program for Rural Banks (SPRB) Plus and the Consolidation Program for Rural Banks (CPRB) to entice mergers among smaller banks with the entry of stronger foreign banks into the country. 

Based on the latest report of the BSP, the number of banks operating in the Philippines reached 622 in end March this year, down from 646 in the same month of 2015. 

The number of big banks or universal and commercial banks increased to 41 as of the end of March from 36 a year earlier with the entry of new foreign banks following the passage of RA 10641. 

On the other hand, the number of thrift banks declined to 66 in end March from from 69 a year ago while the number of rural and cooperative banks decreased to 515 from 541.