The Bangko Sentral ng Pilipinas (BSP) has approved the new guidelines on bank branch establishment in the country, paving the way for the promotion of ease of doing business in the banking industry.
In a statement released over the weekend, the Philippines’s central monetary authority said the new regulation is consistent with BSP’s policy of promoting a competitive banking environment by giving banks more flexibility in expanding their network in strategic locations.
Among the salient points of the regulation include the removal of theoretical capital and the combined capital requirement tied to the geographic location in evaluating branch applications.
The removal of these added capital, according to the central bank, is necessary because the branch network size and location of head office are already embedded in the latest minimum capital requirement for banks.
The regulation also reaffirmed the lifted moratorium on establishing banks in more developed locations in the country, thus encouraging the lenders to establish branches anywhere, including cities considered previously as restricted. These areas, in particular, are Makati, Mandaluyong, Manila, Paranaque, Pasay, Pasig, Quezon and San Juan.
“The move is aligned with the initiatives on banking system liberalization, which include the removal of the branch moratorium in restricted areas and the gradual lifting of the suspension on the establishment of new domestic banks,” the BSP said.
Also among the new points allowed under the new regulation include allowing smaller banks to establish branches in Metro Manila, subject to higher capitalization and licensing fee if said branches are to be in the cities previously considered as restricted.