US not ready for Basel III bank rules—Treasury

Philippine banks are compliant to Basel III standards is because they are super conservative. They’ll let businessmen and entrepreneurs bleed first before they lend money. And when money is lent, exorbitant fees and interests are charged. 

In the Philippines, macro and micro enterprises have difficulty getting funding and resorts to loan sharks. Banks are unfriendly to them. And this is one of the reason why local small businesses don’t flourish. They remain small.  Even some of the mid sized companies don’t become larger because of limited funding.   

I’m not saying that banks suddenly disregard their risk controls but rather working with small businesses on raising capitals. There are a lot of honest and hardworking Filipino businessmen that I know and it breaks my heart when I hear them tell their story on how they have a hard time dealing with the bank.

The Philippines is the 12th most populous country in the world, 23 being the median age – very young demographics, we’ve had strong gdp growth in the past year at 6% which is next only to China. In summary, there is a big potential market here. 

The Chinese have long understood this and Chinese immigrants have become rich (billionaires). Since majority of the Filipino-Chinese control the banks, they have easy access to low interest rate funding. The Koreans have also recognized this opportunity and now come in droves. Europeans and American fund managers understands this and this is the reason why hot money inflows in the Philippines have skyrocketed recently.

Now, who is left out? The Filipinos! Everybody else appears to be getting rich except the average Filipino.

This is a call to the banks – lend money to the Filipino businessmen and entrepreneurs so that their businesses would grow!