On July 15, President Benigno Simeon “Noynoy” Aquino III signed the Republic Act (RA) No. 10641, upgrading the operations of Foreign Banks from 60% to 100%. The upcoming ASEAN Economic Integration scheduled for 2015 prompted Malacañang to permit total participation of foreign banks in the country.
“Let’s think about the reality that we’re moving toward ASEAN integration, and that includes the aspect of financial integration,” Communications Secretary Herminio Coloma told AM Station Radyo ng Bayan. Coloma expressed support for foreign investors who are keen to do business in the Philippines with the request of allowing their trusted banking partners to enter the Philippine banking arena.
Previously, foreign banks could only have a 60% stake of acquisition, purchase, or ownership of a pre-existing Filipino bank or a new subsidiary unit. The Philippine banking sector was restricted by the protectionist act, hindering several potential investors from establishing business presence in the Philippines.
With this policy already in effect, several foreign banks are expected to enter the Philippines just in time for the ASEAN Economic Community to take shape.
