MANILA, Philippines The Senate approved Monday, June 9 a bill seeking to expand the participation of foreign banks in the Philippine financial sector.
Senate Bill no. 2159 or an Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines was approved on third and final reading to allow our economy and our people to reap the benefits thereform, said Senator Sergio Osmeña III, the bill's proponent and chairman of the committee on banks, financial institutions and currencies.
The bill was coauthored by Senator Cynthia Villar.
The measure allows full foreign ownership of domestic banks. It permits the entry of established, reputable, and financially sound foreign banks in the country.
The bills also grants locally incorporated subsidiaries of foreign banks the same banking privileges as domestic banks of the same category, Osmeña said.
The measure will give the Philippines advantage in the economic integration of the Association of Southeast Asian Nations (ASEAN) where a common banking framework will be implemented.
Senae Ok's bill allowing full foreign ownership of PH banks
Hello Okieboy,
Your topic heading is misleading! Read the provisions of the referenced bill. http://www.senate.gov.ph/lisdata/1884315967!.pdf
The bill states:
SECTION 1.
Section 2 of (1994) Republic Act No. 7721 is hereby amended to read as follows:
"Sec. 2. Modes of Entry.- The Monetary Board may authorize foreign banks to operate in the Philippine banking system through any ONE of the following modes of entry:
(i) by acquiring, purchasing or owning up to ONE HUNDRED PERCENT (100%) [sixty percent (60%)) of the voting stock of an existing bank;
(ii) by investing in up to ONE HUNDRED PERCENT (100%) [sixty percent (60%)) of the voting stock of a new banking subsidiary incorporated under the laws of the Philippines; or
(iii) by establishing branches with full banking authority[: Provided, That a foreign bank may avail itself of only one (1) mode of entry: Provided, further, That a foreign bank or a Philippine corporation may own up to a. sixty percent (60%) of the voting stock of only one (1) domestic bank or new banking subsidiary]."
The Philippines has still retained its requirement of 40% ownership by the Philippine Nationals. It has also reinforced the option by the government to suspend the ownership of the foreign bank. Philippine properties owned and foreclosed on by the foreign bank have to be transferred to a Philippine National within five years of acquisition of the property by the bank.
Basically, they are trying to gain financial investment into the country thru this Act and extending its effectiveness to 2020.or longer. Not only does it require ownership of 60% of the banks stock, but requires that the foreign bank post a capital investment in Pesos of P210,000,000.00 for three branches and P35,000,000.00 per additional branches.
Foreign ownership is still limited to a maximum of 60% investment in the country for anything. You may own a condo as an expat, but not the land it is on, etc. etc..
My advice is for anyone interested in this legislation to read the Act and judge for themselves. Revised sections are in bold block type
TC All, RAC 
MANILA, PhilippinesThe House of Representatives has ratified a bill that will pave the way for greater foreign participation in the banking industry in the Philippines, and which proponents say may boost trade and create more jobs.
The measure, approved by both the House and Senate, will allow the Monetary Board to authorize more foreign banks to operate within the Philippine banking system by acquiring, purchasing, or owning up to 100 percent of voting stock of an existing bank, or by investing in up to 100 percent of the voting stock of a new banking subsidiary incorporated under Philippine laws.
Under the present law, foreign banks may only own or invest in 60 percent of voting stock of Philippine finance institutions. The bill seeks to amend that law.
The bill states that only established, reputable and financially sound foreign banks may be allowed into the Philippines.
According to the measure, the foreign bank applicant must be widely owned and publicly listed, unless the foreign bank applicant is owned and controlled by the government of its country of origin.
It says the Monetary Board must also adopt measures to ensure that control of at least 60 percent of the resources or assets of the entire banking system will be held by banks majority-owned by Filipinos.
Foreign banks allowed to establish branches in the country may be required to assign capital of an amount not less than the minimum capital required for domestic banks of the same category. A foreign bank branch may open up to five branches.
Locally incorporated subsidiaries of foreign banks will have the same branching privileges as domestic banks of the same category. The single borrowers limit of a foreign bank branch must be aligned with that of a domestic bank.
The bicameral version of the bill also states that foreign banks may be allowed to bid and take part in foreclosure sales of real property mortgaged to them, and take possession of the mortgaged property for up to five years.
But the title of the property may not be transferred to the foreign bank.
Should the bank win the bid, it must transfer its rights to a qualified Philippine national during the five-year period. If a bank were not able to comply, it would face a penalty of one half of one percent per annum of the price at which the property was foreclosed.
Earlier, in seeking approval for the measure, its proponents said it would augment the countrys financial resources and help create more jobs.
They said the measure was also meant to further strengthen the banking system by providing an opportunity for weaker banks to exit the system through the sale of their voting stock or equity to foreign banks.
It likewise aims to promote the Asean Banking Integration Framework, which is supposed to be implemented by 2020.
Articles to help you in your expat project in Manila
To answer the most common question, yes, expats can open a bank account as long as they have a valid resident visa ...
If you are a intending to become a permament resident here in the Philippines you will certainly need a local ...
The old system of transferring money from your bank in your home country to the Philippines and hoping for the ...
About to move to the Philippines? Wondering how you're going to adapt to your new environment and lifestyle ...
The beauty of the Philippines, with its dramatic modern and old Spanish architecture, plus the golden sands and ...
Consisting of more than 7,000 islands, the Philippines is a real treasure that you can explore during your stay ...
