Senator Sergio Osmeña III. INQUIRER FILE PHOTO
MANILA, Philippines—The Joint Foreign Chambers of the Philippines is urging the passage by Congress of bills seeking to further liberalize the entry and scope of operations of foreign banks in the country.
In a statement issued Monday, the JFC said that amending the 20-year-old Republic Act 7721 (An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines) to increase foreign ownership to up to 100 percent could pave the way for more competition and capital that will ultimately benefit the public.
“Increased participation by foreign banks will help sustain the growth of the Philippine economy,” it said.
RA 7721 was promulgated in 1994 to create a liberalized and more competitive banking system. It allowed the entry of foreign banks either through ownership of up to 60 percent of the voting stock of an existing domestic bank or of a new banking subsidiary or establishment of branches with full banking authority, the JFC pointed out.
Senate Bill 2159, which was introduced by Sen. Sergio Osmeña III and House Bill 3984, principally authored by Rep. Sonny P. Collantes, are meant to amend RA 7721 for further liberalization of the Philippine banking system.
“The passage of HB 3984 would prepare the Philippines for Asean financial integration. It is consistent with the Asean Banking Integration Framework under which, so-called Qualified Asean Banks can operate within Asean jurisdictions on equal terms as domestic banks of that jurisdiction subject to certain prudential and governance standards,” JFC said.
“Moreover, the amendment is consistent with the policy direction of the Bangko Sentral ng Pilipinas to introduce reforms to make the banking industry responsive to the needs of stakeholders and market conditions,” it added.
The JFC said it has already sent letters to the committees on banks of both the Senate and the House expressing support for the two bills.
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