TWO more Taiwan-based banks are setting up shop in the Philippines, adding up to the cluster of foreign banks already in the country since the government further liberalized the financial sector to offshore lenders.
According to Dr. Gary Song-Huann Lin, Taipei Economic and Cultural Office ambassador to the Philippines, the Bangko Sentral ng Pilipinas (BSP) already approved of the entry of the banks that are even now testing the waters prior to full-blast operations.
The ambassador said there is a high probability the banks will open sometime before the end of the year. He did not name the banks.
“There would be two more to officially open soon. Now, they are testing their operations here. I cannot announce on their behalf but, I believe very soon, maybe a few months from now,” Lin told financial reporters.
Lin said since his appointment as ambassador, Taiwan has set up three banks in the country, including First Commercial Bank of Taiwan and Cathay United Bank of Taiwan, which, along with Cathay Life Insurance Co., holds a 22.71-percent stake in Rizal Commercial Banking Corp. (RCBC).
Yuanta Savings Bank formally announced full-service operations on Monday, following the official name change of its acquisition of local lender Tong Yang Savings Bank.
The ambassador elaborated the growth of Taiwanese banks was partly a reflection of the common effort to strengthen the ties among neighboring countries through banking and other financial services. With more Taiwanese banks in the Philippines, Lin hopes that investors will be more confident in doing business with the ease of transactions and gaining financial support and other services from their local community.
“They perceive the Philippines as a growth engine, a future opportunity. That’s why Taiwanese banks set up shops here.”
Lin added, “Taiwan, financially, is in a position to provide financial services not only to Taiwanese investors but also to the local business sector. So the coming of Taiwanese banks should be welcomed, because it will strengthen the bilateral [relations], bring more investments, facilitate more business and serve the general public of the Philippines [better].”
In 2014 former President Benigno S. Aquino III signed Republic Act 10641, providing for the full liberalization of the banking sector. It also allowed foreign banks to fully acquire any local bank, lifting the limit of a 60-percent stake.
Foreign banks were allowed to set up shop in the Philippines in the first wave of liberalization through RA 7221 passed in 2003. Data from the BSP show foreign banks account for 11 percent of the country’s financial industry assets.
Allen Wu, Yuanta Savings Bank executive vice president, said they have yet to determine whether the bank will expand its reach, focusing first on its operations in Manila.
“It will take time for us to know everything in detail about the Philippines. Then it will determine how [our] expansion will be in the Philippines, including the decision whether to operate Yuanta from a savings to a commercial bank,” the executive said.