MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) expects more foreign banks to set up shop in the Philippines amid the country’s strong macroeconomic fundamentals.
BSP Deputy Governor Nestor Espenilla Jr. told reporters on the sidelines of the Annual Reception for the Banking Community Tuesday evening foreign banks looking for growth opportunities would likely establish their presence in the Philippines.
“There are very few growth areas in Asia. For example, it is quite logical that foreign banks are looking at the Philippines because their home markets are stagnant,” Espenilla said.
Espenilla said another Asian bank has expressed interest in the Philippines after President Aquino signed RA 10641 in July 2014 allowing the full entry of foreign banks in the country .
Foreign banks under the new law have also been allowed to own as much as 100 percent of any local bank, removing the previous cap of 60 percent.
Espenilla did not give details of the foreign bank that has a pending application with the BSP.
So far, the BSP has also allowed six more foreign banks to set up shop in the Philippines. These are Sumitomo Mitsui of Japan, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Seoul-based Shinhan Bank, Yuanta Bank of Taiwan, and United Overseas Bank Limited (UOB) of Singapore.
“So if they are looking for growth, the Philippines is one because we have good prospects,” he added.
Espenilla said more foreign banks are likely to enter into strategic partnerships with Philippine banks after the P36.9-billion deal between Security Bank Corp. and The Bank of Tokyo Mitsubishi UFJ Ltd.
“I will not be surprised because it makes sense to move in that direction. At the end of the day, it is a strategic relationship,” he said.
BSP Governor Amando Tetangco Jr. said the entry of new foreign banks under our liberalized regime should further enhance the quality of competition among Philippine banks and nurture innovations that would ultimately benefit the general public.
Tetangco said the Philippine banking community is going to be even more dynamic with the entry of the six foreign banks from Japan, South Korea, Taiwan, and Singapore.
“The entry of these six banks to the Philippines could catalyse further innovations in our banking sector. We expect more to come in,” he said.