THE central bank has approved the application of another foreign bank to operate in the Philippines in line with liberalizing the banking industry.
Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla Jr. said the Monetary Board has given the foreign lender the green light to set up a Philippine branch but declined to identify which bank.
“There is another one [that has been approved]. But they have not announced it yet so I can’t say,” Espenilla said in a text message to reporters on Monday.
Also, the BSP official who is in charge of the Supervision and Examination Sector did not indicate the bank’s country of origin.
Previously, five other foreign banks have been approved by the central bank to operate in the country: Yuanta Commercial Bank Co., 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 opened the banking industry by enacting Republic Act (RA) 10641, or the Act Allowing the Full Entry of Foreign Banks in the Philippines.
The law allows foreign banks to acquire up to 100 percent of the voting stock of an existing domestic bank, effectively removing the 60-percent limit on foreign equity in the banking sector.
Qualified foreign banks are allowed to do business in the Philippines as a branch or a wholly-owned subsidiary.
The BSP’s Monetary Board takes into consideration the strategic relationships and reciprocity rights in accepting foreign bank intending to enter the Philippines.
Besides the BSP’s overall assessment, a separate evaluation by regulators in the banks’ respective countries of origin is also needed before a foreign bank set up shop in the Philippines.