The Bangko Sentral ng Pilipinas (BSP) has approved the application of another foreign bank to operate in the Philippines in line with the liberalization of the local banking industry.
According to BSP Deputy Governor Nestor Espenilla Jr., the Monetary Board (MB) has approved the setting up of a branch by the foreign bank, which he did not identify.
“There was another approval two weeks ago but I cant give further details until the bank concerned has made a public announcement,” Espenilla, who heads the Supervision and Examination Sector at the BSP, said in a text message.
The BSP official declined to mention the name of the bank and where it is currently based.
“It is listed that is why we are careful…,” he explained.
Besides this foreign bank, two more applications were being evaluated by the MB, Espenilla said.
Three other foreign banks had obtained central bank approval for expansion in the Philippines, namely Taiwan’s Cathay United Bank, Japanese lender Sumitomo Mitsui Banking Corp. and the South Korea-based Shinhan Bank.
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.
The act permits 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 applications of foreign bank entrants.
Besides the BSP’s overall assessment, a separate assessment by regulators in the banks’ respective countries of origin is also required of foreign bank applicants.