Foreign investors are now allowed to acquire up to 100% ownership to banks in the Philippines. That means that overseas banks can now fully participate in the economic endeavor of the country particularly in the banking sector.
Bangko Sentral ng Pilipinas Gov. Amando M. Tetangco Jr. said that his team has been very appreciative of the efforts of the country’s legislators to pass RA 10641 into law.
Supported by Republic Act or RA 10641, foreign banks have been given an opportunity to enjoy ownership over Philippine banks as the government now allows them to buy up to 100 precent of any local lender’s voting stock. The new banking rule is a major step to take in bringing foreign direct investments to the country as it may create a tough challenge to the domestic banks especially to those banks that have been struggling in competing even with their fellow domestic banks.
Prior to this new rule was a law that allowed foreign banks to acquire domestic banks for a maximum of 60%. Now that it has been raised to 100% the Philippine banking sector has to exert greater effort to keep its operation even if more foreign banks may get along the way.
The increase on the ownership opportunity of foreign banks over domestic banks may bring a great change in the Philippine Banking System.