MANILA (PNA) – Resiliency of the Philippine economy and full liberalization of the domestic banking system for foreign investors make the country attractive not only to Asian but non-Asian stakeholders.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. stressed this on Monday night during the launch of Taiwan’s First Commercial Bank’s domestic operations, one of the first nine foreign banks authorized to operate in the country after Republic Act (RA) 10641 or the Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines was made into law in July 2014.
Tetangco said the number of non-Asian banks that have indicated interest to operate in the country is “substantial” but he declined to elaborate.
He said these foreign financial institutions are looking at partnering with local players instead of opening a new branch.
He earlier said that six Asian banks have earlier expressed interest to operate in the country but have yet to formalize their intention.
As of end-2016, central bank’s policy-making Monetary Board (MB) has authorized nine foreign financial institutions to operate in the country.
Aside from First Commercial Bank of Taiwan, the other foreign players that received approval are Japan’s Sumitomo Mitsui Banking Corp., South Korea’s Shinhan Bank, Taiwan’s Cathay United Bank, Industrial Bank of Korea, Taiwan’s Yuanta Bank, Singapore’s United Overseas Bank Ltd., Seoul-based Woori Bank, and Taiwan’s Hua Nan Commercial Bank Ltd.
Tetangco said the presence foreign banks in the country is an advantage to the Philippines since it encourages greater competition and benefits the public as these provide better pricing of their products.
He said foreign banks also help the BSP in getting data on foreign investors.
“ In fact, they conduct investors’ briefings and investment seminars dealing with conditions as well as opportunities, economic and financial opportunities in the Philippines,” he said.
Asked on how long these banks translate their intentions to operate in the domestic economy, the central bank chief said this depends on meeting the documentary requirements, among others.
He said First Commercial Bank (FCB) which was originally established in November 26, 1899 as Savings Bank of Taiwan, applied for local operations in February 2016, got the approval last June and started domestic operations last December.
He said banks that have greater focus on some sectors such as the small and medium enterprises (SMEs) have greater chances of being approved.
He said FCB, which is Taiwan’s biggest SME lender, is an example.
“That’s a big plus for them because that is one of the priorities of the government. They should provide more funding to our SMEs and this is entirely consistent with our financial inclusion and inclusive growth objective,” he said.
Tetangco, however, said FCB, the first foreign bank to get MB’s go signal for local operations after the full liberalization of domestic banking system, needs to get approval of its financial technology system.