MICROCAPITAL BRIEF: Philippine Central Bank, Bangko Sentral ng Pilipinas (BSP), Issues Microinsurance Licenses to Bangko Mabuhay, Mallig Plains Rural Bank

Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, has issued licenses to two rural banks, Bangko Mabuhay and Mallig Plains Rural Bank Incorporated, allowing them to provide microinsurance services [1]. As per government requirements, the microinsurance products that the banks will provide are designed so that the cost of the policies will not exceed five percent of the current daily minimum wage of PHP 420 (USD 9.60). The guaranteed benefits will not exceed 500 times the daily minimum wage.

BSP reports that there are currently 50 other rural banks in the process of applying for a “provisional license” to sell microinsurance.

As of 2010, Mallig Plains Rural Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 11.5 million, a gross loan portfolio of USD 8 million, approximately 22,600 borrowers, return on assets (ROA) of 0.68 percent and return on equity (ROE) of 3.66 percent. Financial details on Bangko Mabuhay are not available.

By Nisha Koul, Research Associate

About Bangko Mabuhay: Bangko Mabuhay, a financial institution established in 1972 in Philippines, aims to provide opportunities for low-income households to expand their livelihood activities and increase their incomes. Bangko Mabuhay also has a particular focus on assisting family-owned and operated microenterprises. Financial data on the firm are not available.

About Mallig Plains Rural Bank (Isabela) Incorporated: The mission of Mallig Plains Rural Bank, a financial institution in Philippines, is focused on the development of income-generating and job-creating microenterprises through the provision of loans. As of 2010, Mallig Plains Rural Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 11.5 million, a gross loan portfolio of USD 8 million, approximately 22,600 borrowers, return on assets (ROA) of 0.68 percent and return on equity (ROE) of 3.66 percent.

About Bangko Sentral ng Pilipinas (BSP): Bangko Sentral ng Pilipinas (BSP) is the central bank of the Republic of the Philippines. Established under the provisions of the New Central Bank Act of 1993, BSP is headquartered in Manila and has three regional offices performing cash operations and eighteen branch offices. BSP participates in various advocacy programs concerning microfinance, financial education and consumer protection.

Sources and Additional Resources:

[1] Bangko Sentral ng Pilipinas Press Release, BSP Grants Microinsurance License to Two Rural Banks, http://www.bsp.gov.ph/publications/media.asp?id=2769

MicroCapital.org story, December 12, 2011, “MICROCAPITAL BRIEF: Philippine Central Bank May Raise Microfinance Loan Ceiling, Roll Out Central Credit Information Corporation (CCIC) by Year End,” https://www.microcapital.org/microcapital-brief-philippine-central-bank-may-raise-microfinance-loan-ceiling-roll-out-central-credit-information-corporation-ccic-by-year-end/

MicroCapital.org story, November 7, 2011, “MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas: Filipino Microfinance Borrowing Increases to $170m,” https://www.microcapital.org/microcapital-brief-bangko-sentral-ng-pilipinas-filipino-microfinance-borrowing-increases-to-170m/

MicroCapital Universe Profile: Bangko Mabuhay, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangko+Mabuhay

MicroCapital Universe Profile: Mallig Plains Rural Bank (Isabela) Incorporated, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mallig+Plains+Rural+Bank+%28Isabela%29+Incorporated

MicroCapital Universe Profile: Bangko Sentral ng Pilipinas, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangko+Sentral+ng+Pilipinas+%28BSP%29

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