A high-ranking official of the Bangko Sentral ng Pilipinas (BSP) on Tuesday expressed his support for the extension of the Strengthening Program for Rural Banks Plus (SPRB Plus), which is set to expire this year.
In a panel discussion during the General Membership Meeting of the Chamber of Thrift Banks, BSP Deputy Governor Nestor Espenilla Jr. said that he is “heavily inclined” to recommend the extension of SPRB plus.
Espenilla said that SPRB Plus is a good enough mechanism to allow an orderly exit of a player who has difficulty coping in today’s banking industry environment.
“We cannot build the banking system on the lowest common denominator. So we have to continue to be very pragmatic about it and let in a way exist market forces to rationalize the banking industry,” he said.
According to its implementing guidelines, SPRB Plus is intended to encourage mergers, consolidations and acquisition of rural banks (RBs) and of thrift banks (TBs), which generally serve the same niche markets as the RBs, that is serving the countryside and low-income sector.
“The SPRB Plus is in recognition of the importance of RBs and TBs in providing financial services to the community, particularly in their specialized niche markets, and in maintaining financial stability in the economy, in accordance with Section 17 (d) of RA [Republic Act] 3591, as amended [the Philippine Deposit Insurance Corp. Charter],” the guidelines added.