Bankers air mixed views on proposed lifting of moratorium on bank branching

The banking industry has mixed views on the proposed lifting of the moratorium on new bank branches.

Bankers Association of the Philippines (BAP) executive director Leonilo Coronel, said they are not "so excited" with the lifting of the bank branching moratorium.

"For me, I am not excited if the moratorium is lifted or not. It is not a milestone. There is also a lot of rethinking if you really do need a branch to sell your products," Coronel said.

Coronel said the previous merger and consolidation in the banking industry is not connected with an objective to increase their branch network.

"I think, the decision to merge is not brought about by the goal to have more branches. It is not really important if two merging banks will have more branches because there are a number of ways to reach out to customers through electronic means (i.e use of automated teller machines), alliances and financial kiosks," he said.

Besides, he said merging banks are normally faced with the problem of duplication of branches.

For his part, former central bank governor and Philamlife Insurance Co. president and CEO Jose Cuisia Jr. said the proposal is good "under certain condition because there are banks that are trying to expand."

"The partial lifting of the moratorium, I think, is advantageous as this will provide more banking services such as credits to customers especially in far flung areas," Cuisia said.

Cuisia said this is not only good for the banking industry but also to the economy. "This will serve as an incentive to banks that would want to merge and consolidate. These bigger banks can accommodate more deposits," he said.

According to Cuisia, this will not only benefit big commercial banks but also small banks which want to merge and consolidate to become a stronger bank.