MANILA, Philippines - A program which dangles incentives to investors eyeing to rescue problematic rural and thrift banks has been extended by the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. (PDIC) for another year.
In a statement, the central bank said the Strengthening Program for Rural Banks (SPRB) Plus, set to expire by the end of the year, will be in place until Dec. 31, 2015.
“With this extension, we expect to receive more proposals. We urge the industry to avail of this limited opportunity,” BSP Governor Amando M. Tetangco Jr. said.
“Considering the much stronger condition of the banking system today, this may be the last extension,” he stressed.
The program, introduced by the BSP and the PDIC in August 2010, is aimed at strengthening local banks and also to minimize closures.
It was originally targeted to fortify the rural banking system but the BSP and PDIC included thrift banks two years later as eligible banks that can be rescued.
Under the SPRB Plus, strategic third-party investors that can avail of the sweeteners from the BSP and the PDIC include thrift banks, universal and commercial banks, non-bank corporations, and groups of companies.
These “white knights” may take advantage of the financial assistance, regulatory reliefs, and branching and other incentives under the program.
As of Dec. 18, the BSP said there have been seven merger and consolidation applications involving 14 banks approved under the SPRB Plus.
Earlier, four strategic third-party investors were granted branching incentives under the program for the acquisition of eligible banks. Meanwhile, there are currently two applications for acquisition being processed.