Six Asian banks in talks with BSP for establishment of local offices
By Melissa Luz T. Lopez,
Senior Reporter
SIX ASIAN BANKS are in talks with the Bangko Sentral ng Pilipinas (BSP) to venture into the local market, a senior official said, signalling mounting interest towards the Philippines as it continues to enjoy robust growth.
BSP Deputy Governor Chuchi G. Fonacier said several Asian lenders have “signified interest” to establish their presence in Manila, as these banks pursue expansions within Southeast Asia.
Although she refused to name the lenders, Ms. Fonacier noted two of the live inquiries came from Taiwanese banks, two from China, one from Indonesia, and one from South Korea.
Seoul-based media reported back in July that KB Kookmin Bank is currently looking to set up a branch in Manila after plans to acquire a 20% stake in Philippine lender East West Banking Corp. did not materialize.
Ms. Fonacier earlier pointed out “aggressive” expansions among Taiwanese and South Korean banks as they catch up with their corporate customers who are also setting up businesses in this country.
She clarified that these lenders have yet to file formal application documents with the regulator.
Eleven foreign lenders have entered the Philippines since the signing of Republic Act 10641 in 2014, which lifted the previous limit that allowed only 10 global banks to operate in the country at a given time.
Prior to this, a new foreign bank can set up a branch here only if one of the previously accredited foreign lenders bails.
Of the new players, five banks originate from Taiwan: Cathay United Bank, Yuanta Commercial Bank Co. Ltd., First Commercial Bank, Hua Nan Commercial Bank Ltd., and the Chang Hwa Commercial Bank, Ltd.
Three are from South Korea: Industrial Bank of Korea, Shinhan Bank, and Woori Bank. Others are the Japan-based Sumitomo Mitsui Banking Corp. and the Singapore-based United Overseas Bank Ltd.
Approved in November, Malaysia’s CIMB Bank is the newest to win the nod of the Monetary Board for a full branch here. This completes plans of its parent firm CIMB Group Holdings Berhad to expand their footprint in every country within the Association of Southeast Asian Nations.
BSP’s Ms. Fonacier said foreign lenders are seeing the robust growth of the Philippine economy as an opportunity to score additional yields, especially with both consumer and corporate lending posting double-digit expansions.
“[F]oreign banks are aggressively entering the Philippine market given the economic conditions of the Philippines,” Ms. Fonacier said in a recent interview with BusinessWorld. “I think the expectation is more foreign banks coming in than domestic banks expanding abroad.”
A strong middle-class market as well as a young population also makes the Philippines more attractive for foreign players looking for new clients.
The Philippine economy grew by 6.9% during the third quarter, bringing the nine-month pace at 6.7% versus the 6.5-7.5% growth goal for 2017. By next year, the government is targeting an expansion of between 7-8%.
