MANILA, Philippines - The number of banks operating in the Philippines declined 2.6 percent in the first nine months of last year with the exit of weak players particularly rural banks, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend.
Data from the BSP showed the number of big and small banks operating in the country reached 635 in end September last year, 17 lower than the 652 in end September 2014.
“This indicates the continued consolidation of banks as well as the exit of weaker players in the banking system,” the BSP said.
The number of big banks or universal and commercial banks went up to 37 in the first nine months of last year from 36 in the same period in 2014.
These consisted of 17 private domestic banks, 15 foreign bank branches, three government banks, and two foreign bank subsidiaries.
President Aquino signed RA 10641 in July last year amending the foreign banks law by removing the limit of foreign banks in the country earlier set at only 10.
Foreign banks under the new law have also been allowed to own as much as 100 percent of any local bank, removing the previous cap of 60 percent.
So far, the BSP has also allowed six more foreign banks to set up shop in the Philippines. These include Sumitomo Mitsui of Japan, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Seoul-based Shinhan Bank, Yuanta Bank of Taiwan, and United Overseas Bank Limited (UOB) of Singapore.
The BSP said the number of thrift banks was unchanged at 69 from January to September last year.
However, the central bank said the number of rural and cooperative banks decreased to 529 in the first nine months of last year from 547 in the same period in 2014.
The BSP ordered the closure of 14 rural banks that were placed under the supervision of the Philippine Deposit Insurance Corp. (PDIC) in 2015.
The BSP together with the PDIC and Land Bank of the Philippines have issued the guidelines for the Consolidated Program for Rural Banks (CPRB) to further encourage mergers and consolidations among rural banks.
Meanwhile, the BSP reported the number of branches and other offices of Philippine banks went up 4.3 percent to 9,971 in end September last year from 9,555 in end September 2014.
“The number of banks declined by operating network continued to expand,” it added.
The branches of big banks increased four percent to 5,932 from 5,702, while the branches of thrift banks booked a double-digit increase of 10 percent to 1,983 from 1,804.