The Market Monitor Minding the Nation's Business
By Riza Lozada
The central bank’s policy-making Monetary Board (MB) has approved the domestic operations of Taiwan’s First Commercial Bank, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. said.
According to the First Commercial Bank’s website, it was established as a government institution named Savings Bank of Taiwan on Nov. 26, 1899. It has changed its name after several mergers with other banks.
In 1998, it was transformed into a private entity. It is currently among the world’s top 300 banks.
Full entry of foreign banks in the Philippines is now allowed under Republic Act 10641, signed by President Benigno Aquino III in 2014 as part of the country’s contribution in the economic integration of the Association of Southeast Asian Nations (Asean).
Espenilla said the BSP is still assessing the impact of the entry of foreign financial institutions, citing that “what is happening more is not new entrants but new partnerships.”
”They are looking for possible partnerships,” he said. Espenilla said the approach of foreign banks had shifted from one that operated on its own to finding a partner to get more familiar with the domestic economy.
He explained that the new entrants would focus first on its own citizens and corporate clients, because these were automatic clients.
He, however, pointed out that “if you want a more ambitious play, you want more market penetration so partnership is better.”
“One way of looking at it is many of the new entrants are here first of all to test the market. As they become more comfortable then they get deeper into the market,” he said.
Espenilla added that one year was a short period to assess the foreign banks’ domestic operations because they were still “trying to position,” thus, three years were a better gauge.