By Joann Santiago
MANILA, July 21 (PNA) — The Philippines’ banking system along with several other industries are now better positioned to face that ASEAN integration, which will commence in 2015, following the signing of the Republic Act 10641.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said monetary officials “welcome the signing by the President of RA 10641,” which allows for the full entry of foreign banks in the Philippines and is an amendment of RA 7721, or the “Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines.”
He explained that the regional integration has many benefits and for the banking sector alone one advantage is the augmentation of financial resources.
He said the integration can increase foreign direct investments (FDIs) to the country and this means more available funding for the domestic banking market.
He said the integration will also allow for the transfer of technology and enhance human resource skills.
”These will help further strengthen the banking system and make our banks better-positioned in the face of ABIF (ASEAN Banking Integration Framework),” he said.
The central bank chief also pointed out that “the liberalized system is also expected to generate increased foreign direct investments in the Philippines, including in the manufacturing sector that will create more jobs and raise output.”
”The liberalization of the banking system is part of the reform agenda on capital and financial market development that is designed to create an efficient working environment where the needs of savers and users of funds could be addressed, with the larger view of our pursuit of financial stability,” he added.
Signing by President Benigno S. Aquino III of RA 10641, along with several other measures was announced by Communication Secretary Herminio Coloma on Sunday.
Before the signing of the amendment in the law covering foreign banks, foreign financial institutions can only own up to 60 percent in the domestic bank. (PNA)