More foreign banks are eyeing to establish presence in the Philippines, including representative offices, because of the sound and stable banking system here, Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. said.
Eight Asian banks have expressed interest in putting up operations in the country, although they have yet to submit documentary requirements to be considered as officially applying for entry, Espenilla told reporters.
Some foreign banks and financial institutions, which included non-Asians, meanwhile, have submitted documents to apply for representative offices.
“Representative offices are mainly focused on marketing. They are also important because representative offices are also useful in drawing in investments into the country,” Espenilla said.
The BSP chief said foreign lenders usually first test the domestic market through their representative offices.
“It’s a light presence because it’s for marketing only. But if they see a really good market demand, it may progress into a branch application,” he said.
In 2014, then President Benigno Aquino III signed into law Republic Act (RA) No. 10641, which allowed the full entry of foreign banks.
Under RA 10641, foreign lenders can account for a maximum of 40 percent of the banking industry’s assets.
So far, the BSP has allowed 10 Asian banks to fully operate in the country, namely:
- Japan’s Sumitomo Mitsui Banking Corp.
- Singapore’s United Overseas Bank Ltd.
- South Korea’s Shinhan Bank, Industrial Bank of Korea, and Woori Bank
- Taiwan’s Cathay United Bank, Chang Hwa Bank, First Commercial Bank, Hua Nan Bank, and Yuanta Commercial Bank Co. Ltd. (B.O.de Vera, Inq)