Sumitomo Bank to set up PH branch

MANILA, Philippines–Regulators have approved the entry of Japan’s second-biggest bank in the country in line with the recent lifting of restrictions on foreign ownership in the industry.

Sumitomo Mitsui Banking Corp.’s establishment of a new foreign branch in Manila is expected to facilitate the entry of new Japanese investors in the Philippines.

The new branch expects to have Japanese manufacturers in the Philippines as its main clients aside from targeting Philippine conglomerates.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. said Sumitomo’s entry into the Philippines was approved by the policymaking Monetary Board last Friday.

“The opening of our Manila branch will enhance [Sumitomo’s] ability to provide a wide range of banking services and support clients expanding their business in the Philippines,” the company said in a statement.

Sumitomo cited the country’s strong economic performance as one of the key factors that led to its decision to set up shop in the Philippines. The country’s abundant English-speaking workforce has also made the country an attractive destination for manufacturing and outsourcing firms—two markets that Sumitomo might tap, the statement read.

The Japanese financial giant said it would start necessary steps to open its branch in Manila, which was still subject to the approval of authorities in Tokyo.

Last year, restrictions on foreign ownership in the banking sector were lifted by Congress to attract more investments and to comply with commitments to open certain sectors of the economy ahead of Southeast Asia’s regional integration.

Sumitomo would be the first bank to come in under these new rules.

The Philippine banking sector remains one of the pillars that keep the domestic economy standing. Moody’s Investor Service has a “positive” outlook for the Philippine banking industry. The 70 other banking jurisdictions rated by Moody’s were rated at either “stable” or “negative.”–Paolo G. Montecillo