A law signed by President Benigno Aquino 3rd on Wednesday allows foreign companies or individuals to own up to 60 percent of rural banks.
In a press briefing, Palace deputy spokesman Abigail Valte said the President signed Republic Act 10574 which “opens up another area for foreign capital” in the country and stands to benefit Philippine rural banks.
”I am told that the Bangko Sentral ng Pilipinas [BSP] supports the passage of the bill because it supports the ongoing program for them to strengthen rural banks,” she explained.
There are about 650 rural banks in the country.
The new law amends Section 4 of Republic Act 7353 or the Rural Bank Act of 1992 that limits ownership to Filipinos. Under RA 10574, “non-Filipino citizens may own, acquire or purchase up to sixty percent of the voting stocks in a rural bank.”
To promote and expand rural economic development, the law also allows the Land Bank of the Philippines, Development Bank of the Philippines or any government bank to subscribe within 30 days to the capital stock of any rural bank from time to time in an amount equal to the total equity investment of the private shareholders.
The BSP will draw up the rules and regulations to implement RA 10574 in consultation with stakeholders. The implementing rules and regulations must be published within 90 days after the publication of the new law in two newspapers.