The central bank wants to strengthen the country’s rural banking sector, which it believes has an important role to play in bringing credit to the “underbanked” and developing entrepreneurial activities in the countryside.
The Bangko Sentral ng Pilipinas (BSP) has launched a program that aims to strengthen these small financial institutions for them to better provide financial services to rural and agricultural communities.
“The Rural Banking Industry Strengthening Program (RBSP) is part of the BSP’s broader and continuing efforts to boost the resilience of the rural banking industry, which is a key agent of countryside development as it provides financial services to rural communities, including micro, small and medium enterprises,” BSP Governor Benjamin Diokno said in a statement on Friday.
Vital role
The program will be carried out by an interagency working group headed by a steering committee composed of the BSP, the Department of Agriculture and the Department of Trade and Industry with Monetary Board member V. Bruce Tolentino as chair.
“The BSP pursues the [RBSP] as we recognize the vital role that rural banks play in the areas of financial inclusion and inclusive economic growth,” Tolentino said.
The steering committee will be supported by a technical working group mandated to formulate an action plan, including the development of a capacity-building program for rural banks.
The technical working group is chaired by BSP Financial Supervision Sector Deputy Governor Chuchi Fonacier, and includes representatives from the Agricultural Credit Policy Council, Land Bank of the Philippines, Development Bank of the Philippines, the Securities and Exchange Commission, the Philippine Deposit Insurance Corp. and Rural Bankers Association of the Philippines.
Senior advisers
The program will also benefit from the expertise of senior advisers who will provide technical guidance in activities requiring research, data collection, analysis and policy formulation.
The senior advisers include Mario Lamberte of the University of the Philippines’ Public Administration Research and Extension Services Foundation Inc. and Gilberto Llanto of the Philippine Institute for Development Studies.
The interagency body held its first meeting earlier this month to discuss the scope of the program and the steps moving forward. The steering committee and technical working group will meet regularly over the next months and are expected to submit an initial package of proposed policies, programs and reforms to the Monetary Board by the end of 2021. INQ