TWO foreign banks have indicated interest in setting up representative offices in the Philippines, according to the Bangko Sentral ng Pilipinas (BSP).
“There are two foreign banks who submitted applications for representative offices. These representative offices are mainly focused on marketing,” Central Bank Gov. Nestor Espenilla Jr. told reporters.
He did not name them.
He said these representative offices were also important because they were useful in drawing in investments into the country.
Espenilla said these foreign banks were just “testing” with these light presence but if they couls see that the country has a really good market demand, it may progress into a branch application.
To facilitate the entry of more foreign investments and to enhance competition as the industry gears up for the forthcoming regional integration, the 20-year old Republic Act (RA) 7721 was amended by RA 10641 in July 2014 or the Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippine.
Under the new law, the ownership ceiling of foreign banks in the voting stock of an existing domestic bank or a new banking subsidiary was increased from 60 percent to 100 percent.
The new law also opened the “branch” mode on a perpetual basis to qualified foreign banks and allowed them to establish five sub-branches in locations of their choice. MAYVELIN U. CARABALLO