MANILA, Philippines–South Korea’s oldest and largest bank has been given the green light to open its doors in the Philippines, following policymakers’ move to open up the local financial industry to more foreign competition.
The Bangko Sentral ng Pilipinas (BSP) this week confirmed that Shinhan Bank’s desire to open up a branch in the Philippines was approved last week.
Shinhan follows Japan’s Sumitomo Mitsui Bank to be allowed into the Philippines under a legislation approved last year that removed restrictions on the entry of foreign lenders into the country.
“The bank will apply localized business strategy based on its broad experience in Asian region, providing various financial services to both Korean and local corporations and the Korean community in the Philippines,” Shinhan said in a statement.
Once it opens in September, Shinhan’s Philippine branch aims to target the large South Korean immigrant population in the Philippines. More than 100,000 overseas Koreans are residing in the Philippines and 1 million tourists visit yearly.
The two countries also have strong economic relations, with South Korea being the fifth-largest trading partner of the Philippines.
Shinhan’s entry was approved by the BSP Monetary Board last Thursday, Deputy Governor Nestor A. Espenilla Jr. told the Inquirer late Monday.
In 2011, Shinhan dispatched a regional specialist for market research in the country, showing that the bank has been interested in the local banking sector “for several years.”
Last year, the bank also hosted an investment seminar in partnership with the Philippine Embassy in Seoul.
The bank credited its “thorough and enduring preparation” for the quick approval of its license.
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.
Under new rules, foreign banks may choose from three modes of entry into the local market, namely setting up a foreign branch, acquiring existing institutions, and incorporating an entirely new company.