BSP allows foreigners as bank directors, officers

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is now allowing the election and hiring of foreigners as directors and officers of financial institutions to support the easing of doing business in the country and attract more investments.

BSP Governor Benjamin Diokno said the Monetary Board issued Resolution 546 last April 4 approving the amendments to the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) on the election of foreign nationals as directors of quasi-banks and other BSP-supervised financial institutions and the employment of foreign nationals as officers or employees of financing companies.

Diokno issued Circular 1038 pertaining to the amendment to the regulations on the election and employment of foreign nationals as directors and officers of financial institutions.

“Subject to existing laws, non-Filipino citizens may become members of the board of directors of a BSP supervised financial institutions,” Diokno stated in the circular.

Before the circular was issued, BSP Deputy Governor Chuchi Fonacier said in a text message non-Filipino citizens were only allowed to be directors of financial institutions to the extent of their foreign equity.

Likewise, the law provides that majority of directors of financial institutions should be Filipino citizens.

Fonacier explained the regulator has decided to remove the specific limitations and the provision in the corporation code that majority of the directors or trustees are residents of the Philippines was deleted.

“Circular 1038 is more liberal. This is to support ease of doing business in the Philippines. This is also aimed at attracting foreign investors and basically to level the playing field for non-banks to also tap the expertise of foreign nationals,” Fonacier told The STAR.

Latest data from the central bank showed total assets of the country’s financial system expanded by 8.2 percent to P20.55 trillion in the first two months from P18.99 trillion in the same period last year.

Resources of Philippine banks grew by 9.9 percent to P17.03 trillion from P15.49 trillion, while assets of non-banks inched up to P3.52 trillion from P3.51 trillion.

The number of banking institutions in the country has decreased to 569 offices as of end-March  from 585 in end-March last year. The industry is composed of 46 universal and commercial banks or big banks, 53 thrift or mid-sized banks as well as 470 rural banks.

During the same period, the operating network composed of head offices and branches of the banking system expanded by four percent to 12,417 from 11,936 due mainly to the aggressive branch expansion undertaken by banks.