A new law signed by the Philippine President Benigno Aquino III allows the full entry of foreign banks into the Philippines.
Presidential Communications Operations Office Secretary Herminio Coloma Jr. says that the signing of Republic Act No. 10641 is in preparation for next year’s Asean regional economic integration, which includes financial integration.
The new law amended Republic Act No. 7721, or “An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines.”
The new law will allow foreigners to own up to 100 percent of domestic banks as well as permit the entry of established and reputable foreign banks in the country.
Under the old law, foreign banks could operate within the Philippine banking system only by acquiring, purchasing or owning up to 60 percent of the voting stock of an existing bank.
They could also do so “by investing in up to 60 percent of the voting stock of a new banking subsidiary incorporated under the laws of the Philippines” or “by establishing branches with full banking authority.”
Under the Asean Economic Community, member countries will have “a single market and production base, a highly competitive economic region, a region of equitable economic development and a region fully integrated into the global economy.”