THE Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP)
has relaxed local bank ownership rules further to allow 100-percent voting rights for their foreign stakeholders, the BSP said in a statement Friday.
The lifting of the previous 60-percent cap on foreign ownership is part of the Implementing Rules and Regulations (IRR) of Republic Act (RA) 10641, which liberalized ownership within the Philippine banking sector to encourage increased investment.
In addition to the relaxed stock ownership regulations, foreign banks can also now apply to operate either as branches or as wholly owned subsidiaries in the Philippines.
Despite the relaxed rules, the MB indicated that ownership and entry privileges would still be subject to some conditions.
“The MB shall also consider strategic relationships and reciprocity rights in accepting the application of a foreign bank entrant. In addition, foreign banks interested to enter the Philippines under RA 10641 are required to be widely-owned and publicly-listed in the home country,” the BSP statement clarified.
BSP Governor Amando Tetangco Jr. noted that “Implementing the new law comes at an opportune time because the foreign banks can be vehicles for foreign direct investments into the Philippines at a time when we have attained investment-grade ratings while also preparing for regional integration.”
In addition to the rules regarding individual banks, the foreign ownership limit of 30 percent of the entire banking sector’s assets was raised to 40 percent under the new rules.