The central bank said it is now processing applications from three foreign banks seeking entry into the Philippine market.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. did not identify the three banks when he replied to reporters’ questions about the developments in the entry of foreign players in the recently liberalized Philippine banking industry.
“Currently we are processing three,” he said on the sidelines of the Asian Development Forum on Promoting Remittances For Development Finance held Wednesday.
Earlier this month, Espenilla announced two foreign banks had filed their formal applications and as many as five others had expressed interest in pursuing the application process.
Meanwhile, the BSP official noted that the applicant foreign banks were mostly Asian.
“[As for] European banks, I guess they have their own priorities. They have their own strategy, for example, which markets they will go into first. I guess there will come a time when their assessments will move them in a more Asian direction,” Espenilla suggested.
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.
The act 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’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 bank applicants.