BSP to lift branching restrictions in Manila

MANILA, Philippines - Branching restrictions in Metro Manila will be lifted in July, a Bangko Sentral ng Pilipinas official reiterated amid banks’ bid to expand their reach in the country.

The central bank earlier put a restriction on putting up branches in Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig, Quezon and San Juan, to avoid high concentration of banks in said Metro Manila cities.

In 2011, the BSP moved to lift the branching limitation through two phases, the first which involves allowing big banks with less than 200 branches as of 2010 in the restricted areas to put up branches in Metro Manila.

The second phase, meanwhile, involves the complete lifting of the restriction beginning July 1.

Part of the reason why the BSP limited the establishment of branches in Metro Manila is to allow banks to expand in provinces and reach the unbanked and underbanked, BSP Deputy Governor Nestor A. Espenilla Jr. said.

“We recognized the need to include more people in the financial system (which is) financial inclusion,” Espenilla said.

However, Espenilla said big banks may not readily jump on the opportunity to open branches in Metro Manila right away following the lifting of the branching restriction although he does not discount the idea.

He explained that a number of universal and commercial banks that acquired smaller banks still have backlogs in establishing or rebranding some of their branches in Metro Manila.

At present, banks have been aggressively expanding amid recent capital raising activities.

“What we’re seeing is the big banks are doing both — they’re expanding into NCR (National Capital Region) and they’re expanding as well outside of NCR,” Espenilla recounted.

“If you are raising capital you need to make the money work that’s why they are deploying and mobilizing more deposits... they’re continuing to give loans,” he continued.

He further added: “So in our view, NPLs (non-performing loans) are going down, capital is rising, these are signs of a healthy banking system.”

Data from the central bank showed there were 9,720 head offices and bank branches in the country as of end-September last year, higher than the 9,410 count recorded in end-2012.