PANGLAO ISLAND, Bohol: Two Asian banks have formally applied for approval to operate in the recently liberalized Philippine banking industry, a deputy governor of the central bank said.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla
Jr. did not name the banks, but said on the sidelines of the Financial Stability Board’s (FSB) Regional Consultative Growth for Asia (RCGA) meeting here that the two are in addition to five other foreign banks that have earlier expressed interest in entering the local market.
The five are now in the process of completing the requirements for their application with the central bank, Espenilla said on the sidelines of the Financial Stability Board’s (FSB) Regional Consultative Growth for Asia (RCGA) meeting on this Bohol island.
The local banking industry started attracting foreign players after the country passed Republic Act (RA) 10641, or the Act Allowing the Full Entry of Foreign Banks in the Philippines, in July 2014. It allows foreign banks to acquire up to 100 percent of the voting stock of an existing domestic bank, after it removed the previous 60 percent limit on foreign equity.
Foreign banks may now apply to operate in the Philippines either as a branch or as a wholly owned subsidiary.
The BSP said earlier its Monetary Board will consider strategic relationships and reciprocity rights in accepting the applications of foreign bank entrants.
“We have some criteria for the assessment of applications by foreign banks that want to enter the Philippine banking system. It’s not an assessment that’s based on one indicator or one criterion. It’s an overall assessment of financial capacity, the quality of management and of the systems of the bank,” BSP Governor Amando Tetangco Jr. has said.
Besides BSP’s overall assessment, a separate assessment by the regulators in their respective countries of origin will also be required of the foreign bank applicants, he added.