THE Philippine financial sector has consistently shown stability and resilience despite its vulnerabilities, even standing out as one of Asia’s more notable financial systems.
In 2013, the country was recognized for having the highest microinsurance penetration rate in Asia with 20 percent of its population insured. Figures from the 2014 performance, meanwhile, showed that the Philippine banking system remains sound in terms of resources, which stood at P11.5 trillion by the end of 2014, and capital adequacy ratio, which was recorded at 16.7 percent.
Foreign banks’ interest to enter the Philippine market is also an indication of the healthy growth that the country enjoys. Several foreign banks have already sought the approval of regulators to participate in the country’s financial system, including Japan’s Sumitomo
Mitsui Banking Corp. and Korea’s Shinhan Bank.
Just recently, the Philippine banking system added another feather to its cap when it was lauded by the World Bank (WB) for its consumer protection efforts.
In a review entitled “Republic of the Philippines: Diagnostic Review of Consumer Protection in the Banking Sector,” the WB noted that “there is an impressive focus on consumer protection in the banking sector in the Philippines.”
The multilateral lender cited the string of laws and regulatory instruments issued by the Bangko Sentral ng Pilipinas (BSP) governing various subjects, such as the Truth in Lending Act for loan products, credit cards, microfinance, electronic banking, investment products, responsible lending practices, confidentiality and data protection, cross selling of products, outsourcing of bank functions and compliance systems.
Rural banks, in particular, are no strangers to this customer-centered mindset. They have been practicing personalized banking from the very beginning. As community-based financial institutions, rural banks have molded their businesses with a particular market in mind. Being familiar with the needs of the locality, rural banks develop products and services based on what their local clientele needs.
Late last year, the Bangko Sentral ng Pilipinas released an enhanced consumer protection framework to set the standards for banks on transparency, protection of client information and fair treatment. This move has received the full support of the industry as it puts the customer at the core of banks’ business decisions and operations.
Putting the consumer first is indeed a step in the right direction as it will ensure not only customer satisfaction but the banks’ business continuity as well.