Philippine President Benigno Aquino has signed into law a bill allowing the "full entry of foreign banks into the Philippines" in preparation for next year's Asean regional economic integration.
Communications Secretary Herminio Coloma on Sunday announced the signing of Republic Act No 10641 and that of four other new legislative measures.
To allow the full entry of foreign banks, the new law amended Republic Act No 7721, or “An Act Liberalising the Entry and Scope of Operations of Foreign Banks in the Philippines”.
Under the old law, foreign banks could operate within the Philippine system only by acquiring, purchasing or owning up to 60 per cent of the voting stock of an existing bank.
They could also do so “by investing in up to 60 per cent of the voting stock of a new banking subsidiary incorporated under the laws of the Philippines” or “by establishing branches with full banking authority”.
Coloma said the new law, RA 10641, was “the product of careful study”.
“Let’s think about the reality that we’re moving toward an Asean integration, and that includes the aspect of financial integration,” he said.
“There are a lot of [businesspeople] who want to invest here in our country,” Coloma said, adding that they asked if the banks that they had been using in their businesses could be allowed to open here.
Under the Asean Economic Community, member countries will have “a single market and production base, a highly competitive economic region, a region of equitable economic development and a region fully integrated into the global economy”.