PCC, BSP ink pact on bank mergers, acquisition

MANILA, Philippines — The Philippine Competition Commission (PCC) and the Bangko Sentral ng Pilipinas (BSP) inked yesterday an agreement to pursue a harmonized campaign to foster competition amid the changing landscape of the banking industry.

PCC chair Arsenio Balisacan and BSP Governor Nestor Espenilla Jr. led the signing of the memorandum of agreement (MOA) yesterday. BSP Deputy Governor Chuchi Fonacier and PCC chief of staff Mel Pana witnessed the signing ceremony.

Balisacan said PCC and BSP have common interests in the regulation of bank and non-bank financial institutions.

“In regulating banks, the PCC acknowledges that while financial institutions serve as the intermediary for money, banking and credit that businesses rely on, they themselves operate as businesses too,” he said.

According to Balisacan, the partnership is a strong push toward efficient regulatory approach concerning the banking and financial industry.

The central bank is mandated to promote and maintain stability in the monetary and financial system, while PCC’s obligation is to promote free and fair competition,” he said.

“Price and monetary policy stability serve as pillars of sound macro-economic fundamentals on which firms base their decisions. This could contribute toward financial inclusion by helping ensure that firms in the financial sector provide high quality services at reasonable prices and continue innovating products for consumers,” Balisacan said.

As PCC promotes competition that keeps prices in check, this in turn directly supports BSP’s goal of keeping inflation within target.

The antitrust and competition authority is mandated under the Philippine Competition Act to review mergers and acquisitions valued at least P1 billion to ensure that these deals will not prejudice the interest of the consumers.

Recognizing the importance of banks in shaping the economy, PCC and BSP agreed to create a streamlined set of rules for consolidation, which may depart from the usual period and process.

Balisacan said the partnership could lead to faster consolidation of banks under the BSP’s Consolidation Program for Rural Banks (CPRB) in line with the PCC’s regulatory foothold on merger review.