Tetangco: Supporting countryside dev't necessary to inclusive growth

Inclusive growth can only happen if countryside development is supported by banks and other institutions, the head of the Bangko Sentral ng Pilipinas said Monday.
 
"Inclusive growth is possible only if countryside development is given the support it needs. Embedded and part of the communities where it operates, rural banks are in the best position to help spur rural development," said BSP Governor Amando Tetangco Jr. at the 60th annual convention of the Rural Bankers Association of the Philippines
 
Tetangco said that rural banks receive “broad-based support” from the government, which passed Republic Act 10574, allowing foreign equity into rural banks; universal and commercial banks; international organizations and grant-giving agencies; and national institutions including the Philippine Deposit Insurance Corporation (PDIC) and the BSP.

The PDIC and the BSP are funding the P5-billion Strengthening Program for Rural Banks (SPRB), which offers incentives to entice larger banks–commercial banks and well-managed thrift banks–to acquire ailing rural banks.
 
"It is clear, we all want the rural banking sector to succeed. Why is this so? Well, roughly 40 percent of Filipinos live outside urban areas. And based on latest statistics, the incidence of poverty is higher in the countryside," he said.

Tetangco urged banks to look into mergers, saying that BSP was not getting the results it was hoping for in that area.

"While we continue to receive applications for incentives under the BSP-PDIC Strengthening Program for Rural Banks, the reality is... less than 20 percent of available funding for capital build-up has been utilized," he said.

"We understand that there are concerns related to mergers and having new stockholders into your banks. However, if your vision is to see your bank scale up and grow as catalyst for growth in your communities… mergers could be the path to take," he added. — BM, GMA News