BSP Urges Financial Institutions to Merge With Key Industry Players in the Philippines
The Bangko Sentral ng Pilipinas (BSP) urges financial institutions to merge with other local banks for extensive and more substantial growth to refrain from unexpected events that cause a widespread impact on the economy.
BSP Governor Benjamin Diokno stated that new regulations for more efficient requirements of several regulatory agencies for bank mergers, consolidations, and acquisitions would be released in two months.
Diokno expressed, “The memorandum of agreement recently signed by the country’s financial regulators provides an efficient mechanism for banks to pursue.”
He added, “With higher capital and resources and better economies of scale, banks can widen their reach and gain more access to investments and client base.”
BSP, the Philippine Deposit Insurance Corp. (PDIC), the Securities and Exchange Commission (SEC), the Cooperative Development Authority (CDA), and the Philippine Competition Commission (PCC) have already signed an arrangement to process bank mergers and acquisitions within 55 business days earlier this month.
The move aligns with the administrations to boost transparency with public transactions via simplified procedures and requirements to hasten business transactions.
The program aims to synchronize documentary requisites, simultaneously implement agencies’ processing, reduce process time, and facilitate rapid action of banks’ merger applications.
Diokno noted that aside from the mentioned objectives, it also targets to foster an advanced working arrangement among the signatory agencies.
Diokno continued that agencies should provide implementing guidelines within 60 business days from signing the deal. The agreement policies on the other hand will be sent through a joint circular.
The agreement also provided that agencies may aim for additional actions such as establishing a data portal for the electronic submission of documentary requisites that authorized agency personnel can access.
The systemized requirements for merger proposals of banks will effectively decrease documentary requirements from 58 to 30 to reduce the total processing time of submissions from 160 days to only 55.