The central bank has approved the application of another foreign bank to operate in the Philippines following the liberalization of the country’s banking industry.
Nestor Espenilla Jr., deputy governor at the Supervision and Examination Sector of the Bangko Sentral ng Pilipinas (BSP), said the Monetary Board has approved the setting up of a branch by the foreign bank, which he declined to identify.
“There is one more that came in after Industrial Bank of Korea,” Espenilla said in a text message to reporters on Thursday.
The BSP official also did not say where the bank is currently based although he said it is an Asian bank.
“The Monetary Board approved it last Thursday [June 25] but they have not announced yet,” he explained.
Four other foreign banks have previously obtained central bank approval to operate in the country. They are Industrial Bank of Korea, Sumitomo Mitsui Banking Corp. of Japan, Shinhan Bank also of Korea, and Cathay United Bank of Taiwan.
In July 2014, the Philippines liberalized the banking industry with the enactment of Republic Act (RA) 10641, or the Act Allowing the Full Entry of Foreign Banks in the Philippines.
The act allows foreign banks to acquire up to 100 percent of the voting stock of an existing domestic bank, after the law removed 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.