The bank liberalization and financial-sector integration happening in the Philippines should encourage collaboration among foreign banks and local banks and should not be viewed as competition, according to Sumitomo Mitsui Banking Corp. (SMBC).
SMBC Director and General Manager and Investment Banking Department Asia Head Noburu Kato said local banks should not see the entry of foreign banks, like Sumitomo, as competitor but as an opportunity for business collaboration.
Kato said the local banks have an edge on distribution that foreign banks like them do not have.
“We can have collaboration with local banks and work together to increase business in the Philippines. We have talked to Japanese investors looking at the Philippine market. They said it’s very good to invest in the Philippines. They see the attractiveness of the Philippines and that the Philippines is a good investment destination,” he said at the Financial Times–First Metro Philippines Investment Summit on Wednesday.
“Many Japanese want to come to the Philippines. We don’t have a branch network so we want to create a strong relationship with local players to develop businesses,” he added.
Kato said they can also use overseas funds to finance infrastructure projects in the country, for instance.
First Metro Investment Corp. (FMIC) President Roberto Juanchito Dispo told reporters the bank-liberalization program brings both “excitement and anxiety.”
He said anxiety because the increased competition would impact the net interest margins of the banks.
As for excitement, he said this will bring synergy for local and foreign banks.
“It will raise the banking standards and bring deeper banking penetration in the country. The good thing is the personalities of the new entrants are regional in nature,” he said.