Lawmaker wants PHL banking laws probed, scrutinized

The House committee on banks and financial intermediaries should determine the adequacy of Philippine banking laws, considering that 41 banks were closed in the past 18 months, party-list Representative Arnel Ty urged on Thursday.

 

The closures had a negative impact on 547,000 depositors and displaced at least 2,000 employees, Ty, a member of the committee on banks and the sectoral Representative of the LPG Marketers’ Association (LPGMA), noted in a statement.

 

“We have to ascertain whether existing laws are adequate to discourage unsafe, unsound and fraudulent banking practices, protect depositors, promote savings, support responsible credit, and reinforce public confidence in the (banking) industry,” Ty said.

 

According to the state-run Philippine Deposit Insurance Corp., it took over 29 banks in 2011 and 10 so far this year. The figures exclude those closed prior to 2011.

 

Ty also called on the Department of Labor and Employment (DOLE) to help find new jobs for the 2,000 workers from 220 bank offices affected by the closures.

 

“The DOLE and the Bankers Association of the Philippines should find ways to absorb the displaced personnel in the new branches being put by the bigger universal and commercial banks that continue to expand,” Ty said.

 

To strengthen the rural banking subsector, the BSP has been looking for institutions–Strategic Third Party Investors or “white knights”–that are willing to invest in troubled countryside banks.

 

This quest is embodied in the Strengthening Program for Rural Banks Plus (SRBP Plus), unveiled last May 16, offering incentives to entice larger banks–commercial banks and well-managed thrift banks–to acquire ailing rural banks.

 

“What should be clear is that BSP and PDIC have now put on the table all the incentives it can think of and legally provide to decisively enlarge, once and for all, the solid core of a sound rural banking system,” said BSP Deputy Governor for supervision and examination Nestor Espenilla.

 

The original program, expiring in August, entails limited incentives and opens only to the stronger rural banks.

 

“SPRB Plus offers a variety of financial and regulatory relief and incentives to improve the prospects for success of new banking partnerships. It would take effect until end next year,” the BSP said.

 

The PDIC board has approved four of 17 applications for the current SPRB involving 31 rural banks as of end-March this year. At least two applications are being processed. The banks–mostly rural banks–closed from October 2010 to June 2012 are:

1. Rural Bank of Banayoyo (Ilocos Sur), Inc.
2. First Provincial Bank (A Rural Bank), Inc. May 28, 2012
3. Rural Bank of Gigaquit (Surigao del Norte), Inc. May 21, 2012
4. Rural Bank of Nasugbu, Inc. March 08, 2012
5. Cooperative Bank of Iloilo March 08, 2012
6. Rural Bank of Luna (La Union), Inc. March 08, 2012
7. Rural Bank of Jordan (Iloilo), Inc. February 10, 2012
8. Rural Bank of Calubian (Leyte), Inc. February 10, 2012
9. Rural Bank of Angadanan (Isabela), Inc. January 17, 2012
10. Rural Bank of Valencia (Negros Oriental), Inc. January 17, 2012
11. Rural Bank of Mawab (Davao), Inc. December 28, 2011
12. Rural Bank of Mabini (Batangas), Inc. November 25, 2011
13. LBC Development Bank (LBC Bank) November 09, 2011
14. First Reliance Bank [Rural Bank of Indang (Cavite), Inc.] November 03, 2011
15. Rural Bank of Tarlac, Inc. October 10, 2011
16. Bank of Calape (Savings and Mortgage Bank) October 07, 2011
17. Rural Bank of Garcia-Hernandez (Bohol), Inc. October 07, 2011
18. Rural Bank of Matanao (Davao del Sur), Inc. September 21, 2011
19. Express Savings Bank, Inc. September 21, 2011
20. Rural Bank of Tampakan (South Cotabato), Inc. September 01, 2011
21. Rural Bank of President Roxas (North Cotabato), Inc. September 01, 2011
22. Rural Bank of Tagudin (Ilocos Sur), Inc.
23. Rural Bank of Nabas (Aklan), Inc.
24. Mambajao Community Rural Bank, Inc. September 01, 2011
25. Banco Filipino Savings and Mortgage Bank  June 08, 2011
26. Rural Bank of Agno (Pangasinan) Inc. May 19, 2011
27. GMA Rural Bank (Cavite), Inc.
28. Growers Rural Bank (Angono, Rizal), Inc. March 14, 2011
29. Rural Bank of Mapandan (Pangasinan), Inc. (RBMI) March 11, 2011
30. Rural Bank of Norzagaray (Bulacan), Inc. (RBNI)  March 11, 2011
31. Rural Bank of Manjuyod (Neg. Or.), Inc. March 01, 2011
32. Rural Bank of Bingawan (Iloilo), Inc. February 17, 2011
33. Rural Bank of Zapote (Las Pinas), Inc. February 16, 2011
34. Rural Bank of Sta. Rosa (Nueva Ecija), Inc. January 25, 2011
35. Ibalon Rural Bank (Tabaco, Albay), Inc. January 25, 2011
36. Rural Bank of Baler (Aurora), Inc. (RBBI) January 18, 2011
37. First Country Rural Bank (Pasig City), Inc. January 10, 2011
38. Assemblyman Rafael B. Legaspi Rural Bank of Aklan, Inc.. (Assemblyman Rafael B. Legaspi RB) November 11, 2010
39. Rural Bank of Ayungon (Negros Oriental), Inc. (RB Ayungon) October 21, 2010
40. Rural Bank of Lagonoy (Camarines Sur), Inc. (RB Lagonoy) October 21, 2010
41. Rural Bank of Hinigaran (Negros Occidental), Inc. (RB Hinigaran) October 21, 2010  

—Earl Victor Rosero/VS, GMA News