FIVE foreign banks from Asia are expected to set up operations in the Philippines following the liberalization of the banking sector.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. who expressed this hope, however, did not identify the banks. But in a text message to reporters on Tuesday, he said that one application currently pending, while another is in process.
Yet another, he said, would soon apply, while two others have expressed interest.
“Five more possible. These are all Asian listed banks,” said Espenilla.
The banking sector began 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.
The act lifted the prevailing equity limit of 60 percent for foreign partners and allowed 100 percent ownership of the voting shares in an existing domestic bank.
Foreign banks may now apply to operate in the Philippines either as a branch or as a wholly owned subsidiary.
The BSP’s Monetary Board will consider strategic relationships and reciprocity rights in accepting the applications of foreign bank entrants.
Besides BSP’s overall assessment, a separate assessment by the regulators in the banks’ respective countries of origin will also be required of the foreign applicants.
At present, seven foreign banks have been given the green light to take over a local bank or set up a branch in the country. They are: South Korean Woori Bank; Japanese lender Sumitomo Mitsui Banking Corp.; South Korea’s Shinhan Bank; Taiwan’s Cathay United Bank; Industrial Bank of Korea; Yuanta Commercial Bank Co.; and Singapore-based United Overseas Bank.