Philippine banks must consolidate more in preparation for the upcoming Association of Southeast Asian Nations (Asean) economic integration in 2015, executives said during the ING-Economic Journalists Association of the Philippines forum held in Makati City on Wednesday.
According to Jose Sio, executive vice president and chief finance officer of SM Investments Corp., there should be more consolidations and mergers to sustain the Philippines in the long run.
“Come 2015, when Asean opens up, banks in Singapore, Indonesia, Malaysia, Thailand and other countries in Asean can open branches here. Filipino banks can also open in other Asean countries,” he said.
However, the executive noted that Philippine banks ranks lower compared to the banks in other Asean countries.
Sio cited for example the case of banking giant BDO Unibank Inc., which has P1.3 trillion in total resources and is the biggest bank in Philippines. However, compared to all Asean countries, the bank is at the bottom in terms of ranking.
“The bigger banks are in Malaysia, Thailand and Indonesia, we have too much small banks here. When things come, we don’t know what will happen. But these bigger banks, I’m sure they will expand here in the Philippines,” he said.
Meanwhile, ING Bank Manila Country Manager Consuelo Garcia also said that banks would have to consolidate since they face increasing investments to comply with the requirements of Basel III, which affects all banks globally.
“Banks definitely will be pressured to consolidate as they face increasing investments, plus the fact that they have consumers that are more demanding. Hopefully the other will follow soon,” she said.
Earlier, the Bangko Sentral ng Pilipinas encouraged banks to undergo mergers or acquisitions to create banks with bigger capitalization and ability to provide more financial services to consumers.