July 06, 2014

BSP to implement key banking reforms

According to an article from The Philippine Daily Inquirer, the BSP is looking to implement key banking reforms in the next few months. The BSP was quoted as saying that a bill allowing foreign banks to own 100% of local banks is now awaiting the signature of President Aquino.

The BSP expects it to be signed by the President by end of July and thereby lapse into law. After this, the BSP will have 90 days to come up with the implementing rules and regulations for the law.

Our take: Based on the BSP’s statements, the liberalization of foreign bank entry may take effect sometime in late 3Q14 or early 4Q14. The passage of this bill into law, as well as the drawing of the specific rules and regulations, is expected to generate more interest from foreign banks looking to establish their banking presence in the country.

Malaysia’s CIMB, Japan’s Mitsubishi UFJ Financial Group and Taiwanese bank TPG were some of the regional banks that were reportedly interested in acquiring strategic stakes in Philippine banks.– WealthSec