Number of banks down by 33 to 764 as of September - BSP

MANILA, Philippines -  The Bangko Sentral ng Pilipinas (BSP) said yesterday the number of banks operating in the Philippines went down by 33 in the first nine months of last year on the back of the continued consolidation of major players in the industry as well as the closure of problematic banks.

Data released by the central bank showed that the number of banks stood at 764 as of end-September last year from 797 a year earlier and nine banks fewer that the end-June tally of 773.

The BSP said the number of banks continued to decline due to mergers and consolidations as well as the exit of weaker players in the banking system.

Data showed that the number of universal and commercial banks was steady at 38 while the number of thrift banks was also unchanged at 73.

However, the number of rural banks fell to 653 from January to September last year compared to 661 in the first nine months of 2009 due primarily to the closure of weaker banks.

The BSP reported that the number of branches of universal and commercial banks, thrift banks, and rural banks increased by 176 to 8,740 in the first nine months of last year from 8,564 in the same period in 2009.

A total of 19 banks were placed under receivership by the state-run Philippine Deposit Insurance Corp. (PDIC). These include Cooperative Bank of Lanao del Norte, Rural Bank of Sta. Cruz (Marinduque), Rural Bank of Pitogo (Quezon), Rural Bank of San Antonio de Padua (Laguna), Rural Bank of Milaor (Camarines Sur), Rural Bank of Isulan (Sultan Kudarat), Rural Bank of St. Joseph (Baras), Rural Bank of San Antonio (Zambales), Penafrancia Savings and Loan Association, Rural Bank of Bangued (Abra), Rural Bank of Ozamis City (Misamis Occidental), Cooperative Bank of Nueva Ecija, Cooperative Bank of Camarines Sur, BMS Rural Bank, Baini Rural Bank (Pangasinan), Rural Bank of Ivisan (Capiz), Eurocredit Community Bank, Rural Bank of Laoac (Pangasinan) and Apex Rural Bank (Bulacan).

Earlier, BSP Deputy Governor Nestor Espenilla Jr. said studies showed that there are still too many universal and commercial banks considering the size of the country’s economy.

 “In fact you wouldn’t say that the banking industry in the Philippines is very concentrated to begin with. Lending agencies even say that the industry is fragmented because for the size of the economy, there is still too many commercial banks at 38,” Espenilla stressed.

The BSP and state-run Philippine Deposit Insurance Corp. (PDIC) recently launched a P5- billion incentive scheme to spur mergers and consolidations in the country’s rural banking industry under its Strengthening Program for Rural Banks (SPRB).