MANILA, Philippines – The country may see the entry of more foreign banks soon as the Bangko Sentral ng Pilipinas (BSP) readies its proposed amendments to the law that will pave the way for the liberalization of foreign banks’ entry.
BSP Governor Amando M. Tetangco Jr. told reporters yesterday the central bank is preparing the proposed amendments to RA 7721 or the law governing the entry and operations of foreign banks in the country.
“We’re looking at that and we will be presenting our proposal to Congress, which should basically entail the liberalization of foreign bank entry,” Tetangco said on the sidelines of Euromoney’s Philippines Investment Forum 2014.
The act liberalizing the entry of foreign banks in the country, approved in 1994, only allows the entry of 10 foreign banks.
Tetangco said the form of liberalization needed – whether increasing the figure or completely removing the limit – will still be assessed.
“That’s something we need to discuss but the overall thrust is to liberalize our regulations with respect to the entry of foreign banks,” Tetangco said. “There are different ways and we are looking at those possibilities now,” he added.
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The Philippines is gearing up for the Association of Southeast Asian Nations Economic Integration set to be launched by 2015. Part of this is the financial integration which will give the region’s banks a bigger market and more opportunities for growth.
Tetangco said the country needs to amend RA 7721 to allow the entry of more foreign banks.
A number of foreign banks have already expressed interest in the Philippine market, especially given its population, BSP Deputy Governor Nestor A. Espenilla Jr. said.
Local banks, meanwhile, have been raising capital and aggressively expanding in Metro Manila and in provinces in preparation for the integration of Asean banks in 2020.
