Advancements in the Philippines' investment sector, capital markets, and macroeconomic landscape are attracting more bankers today to expand operations outside of their own territories.
Bangko Sentral ng Pilipinas Deputy Governor Chuchi G. Fonacier said the BSP is currently evaluating the application papers of three foreign financial institutions who are interested in setting up branches in the Philippines.
The three banks from Hong Kong, Indonesia, and South Korea have signified their interest to operate here, Fonacier said, adding that the Bangko Sentral has so far authorized 12 foreign banks to set up branches in the Philippines since former president Benigno Aquino III signed RA 10641 in July 2014 removing restrictions in the number of foreign financial firms that can do business in the country.
The 12 foreign banks are: Hua Nan Commercial Bank of Taiwan; Chang Hwa Bank Commercial Bank Ltd, Cathay United Bank, First Commercial Bank, Yuanta Bank; Shinhan Bank of Korea, Woori Bank, Industrial Bank of Korea; Singapore United Overseas Bank Ltd.; Sumitomo Mitsui of Japan; Malaysia's CIMB Bank; and China's Industrial and Commercial Bank of China.
The Indonesian, Hong Kong, and South Korean banks will be allowed to operate in the Philippines as soon as they submit all documents required by the government banking regulator.
In the case of the Indonesian bank, it has yet to decide on which capacity it will enter the Philippines' financial sector. Fonacier said they can operate in a so-called QAB (Qualified Asean Bank) mode.
"Pwede rin sila as a QAB [They (banks) can operate in a QAB capacity]", she said in Tagalog, during the sidelines of The Banker's Night hosted by the BSP.
However, since Indonesia and the Philippines have yet to finalize a deal for the creation of a QAB, it will be a tedious process that will take a longer period should the two countries choose this option. QABs are financial institutions with world standards that adhere to rigorous policies and mutual consents between a home and host nation.
Fonacier said the process to set in motion the parameters to comply with a QAB entails a great deal of time and effort. As for the Korean bank applicant, she said the Bangko Sentral is still analyzing the proposed framework that the Korean bank plans to implement, and if this structure is something that the government can work with.
Bangko Sentral governor Benjamin Diokno, during the Banker's Night, said the BSP is committed to leverage on the latest tech, boost risk governance, and aim for broader access to financial services.
Diokno added that the BSP is also firm in upholding the principles of its financial system, protect the interest of its people, and ramp up reforms in the investment markets.
