The central bank has approved the application of another foreign bank to expand its presence in the Philippines as part of the government’s program of liberalizing the local banking industry.
Nestor Espenilla Jr., deputy governor at the Supervision and Examination Sector of the Bangko Sentral ng Pilipinas (BSP), said on Tuesday the Monetary Board has approved the setting up of a branch by the foreign bank, which he did not identify.
“Another foreign bank was approved by the Monetary Board to expand here,” Espenilla said on the sidelines of the Chamber of Thrift Banks 2015 Convention held in Makati City.
The BSP official did not mention the name of the bank and where it is currently based but said it is another Asian bank.
“We are going to let them make the announcement first because it is a listed firm in that country,” he explained.
Two other foreign banks had previously obtained central bank approval for expansion in the country, namely Japanese lender Sumitomo Mitsui Banking Corp., which secured a BSP approval in February, and the South Korea-based Shinhan Bank, whose application to open a branch was approved in March.
In July 2014, the Philippines liberalized its banking industry by passing Republic Act (RA) 10641, or the Act Allowing the Full Entry of Foreign Banks in the Philippines, in July 2014.
The act allows foreign banks to acquire up to 100 percent of the voting stock of an existing domestic bank, after the law removed the previous 60 percent limit on foreign equity.
Qualified foreign banks are allowed to operate in the Philippines either as a branch or as a wholly owned subsidiary.
The BSP’s Monetary Board considers strategic relationships and reciprocity rights in accepting the applications of foreign bank entrants.
Besides the BSP’s overall assessment, a separate assessment by the regulators in the banks’ respective countries of origin is also required of foreign bank applicants.