BSP allows all banks to open new branches even in 'restricted cities'

The Bangko Sentral ng Pilipinas has finally set banks free to set-up and operate “as many branches as its qualifying capital can support” –a move the financial sector has long waited for ever since the moratorium was imposed in 1999.   BSP Circular 759, which will take effect within June after formal publication, also provides that the Bangko Sentral cannot wait too long for the banks to make good on the branch plans.   The date of opening of approved branches was extended to three years from one year.   According to latest BSP data, there were 9,050 banking offices in 2011—up by 181 from 8,869 offices in 2010.   The new guidelines authorize the BSP to deduct the branch processing fee from the demand deposits the banks have with the central bank.   If BSP Supervision and Examination Sector finds that a bank no longer has enough capital to allow it to open new branches, it can suspend or revoke the approved branch.   The last liberalization of bank branches happened in June last year when it gave a handful of bank the go signal to set-up branches in the previously eight restricted cities: Makati, Mandaluyong, Manila, Paranaque, Pasay, Pasig, Quezon, and San Juan   Development Bank of the Philippines, Land Bank of the Philippines, Security Bank, East West Bank, Bank of Commerce, Planters Bank, and Philippine Business Bank were allowed to expand in the restricted cities.   Second-tier universal and commercial banks (UKBs) , as well as thrift banks, that have less than 200 branches in restricted areas at end-2010 were cleared to apply for and put up branches in the restricted areas not later than June 2014.   These UKB banks must have at least P10 billion in combined capital accounts, while the thrift banks hurdle is at P3 billion.   Even banks that have lower combined capital accounts can put up new branches if they commit to and build up their capital to the required mark by June 2014.   The BSP non-refundable special licensing fee per branch is P20 million per UKB and P15 million per thrift bank.   Phase Two starts on July 1, 2014 wherein branching will open up to all banks except rural and cooperative banks not allowed to operate branches in Metro Manila. — ELR, GMA News