PANGLAO ISLAND, Bohol, Philippines – Two Asian banks have filed their applications to put up shop in the country, an official from the Bangko Sentral ng Pilipinas said yesterday.
BSP Deputy Governor Nestor A. Espenilla Jr. told reporters that apart from the two, another five from the region are currently completing their application requirements to be able to operate in the country.
The official, however, declined to name the banks pending the approval of their applications for a banking license in the country.
This development came following the signing of the amended foreign banks law in July last year. RA 10641 basically liberalized the entry of foreign lenders in the country, earlier limited to only 10.
At the same time, foreign banks have been allowed to buy as much as 100 percent of any local lender, amending a previous provision that only permits them to own up to 60 percent of any Philippine bank’s voting stock.
The BSP released the implementing rules and regulations in November and opened up the application process in late December.
Espenilla said that foreign banks outside the region have also inquired and expressed interest in operating here in the Philippines.
The BSP last month said it has approved the entry of Japan’s Sumitomo Mitsui Bank in the country.
The Philippine banking industry remains attractive to foreign players due to its 100-million population and a low credit penetration as its loan-to-deposit ratio at 58 percent as of the first quarter of 2014.
The central bank last year said opening up the banking system to more foreign banks will help attract more investments as they can easily facilitate the transactions of non-Filipino firms and institutions wishing to operate in the domestic market.
As this is also seen increasing competition in the banking sector, the BSP has said this will push local lenders to become more efficient and to provide better value to their clients.