According to a report from the Malaya Business Insight, a Philippine newspaper, a study by Dr Johnny Noe E Ravalo of Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, offered a range of data on the banking sector in the Philippines including that the bank density is 8.6 banks per 1,000 square kilometers, at least five banking offices exist in every municipality or city, there are approximately 10,700 persons per banking office, 207 microfinance banks exist nationwide and the largest concentration of banks (32 percent) occurs in the capital. The actual report by Dr Ravalo is not available online.
In arguing that an advanced level of technology exists in the sector, Dr Ravalo cites indicators such as the following: Philippine-owned banks have 56 automatic teller machines compared to seven owned by foreign banks and 20 Filipino banks offer mobile and internet transactions compared to three foreign banks offering the same.
Dr Ravalo further states that low interest rates in the Philippines encouraged growth in the banking sector and that this has been reflected in the return on equity (ROE) for banks, which stood at 10.2 percent in 2010, up from 2 percent in 1999.
On lessons learned from the 2008 financial downturn, Dr Ravalo suggests that the Philippine banking sector prioritize the “implementation of other innovative mode[s] of asset clean up; implementation of a time-bound prompt corrective action (PCA) framework; and harmonization of corporate governance standards with other financial regulators” [1].
By Medha Ravi, Research Associate
About Bangko Sentral ng Pilipinas (BSP):
Established in July 1993, Bangko Sentral ng Pilipinas (BSP) is the central bank of the Republic of the Philippines. BSP has three regional offices performing cash operations and cash administration and eighteen branch offices as of 2008. BSP participates in advocacy programs concerning microfinance, financial education and consumer protection.
Source and Resources:
Business Insight news article, “High bank density and bigger profits”, http://www.malaya.com.ph/jan31/busi1.html
MicroCapital.org story, October 19, 2010, “MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas (BSP) Approves Establishment of Microfinance Institutions in Underserved Areas of the Philippines”, https://www.microcapital.org/microcapital-brief-bangko-sentral-ng-pilipinas-bsp-approves-establishment-of-microfinance-institutions-in-underserved-areas-of-the-philippines/
MicroCapital.org story, June 17, 2010, “MICROCAPITAL BRIEF: Two Thirds of Philippine Households Lack Bank Accounts, Says Central Bank Official”, https://www.microcapital.org/microcapital-brief-two-thirds-of-philippine-households-lack-bank-accounts-says-central-bank-official/
MicroCapital’s Microfinance Universe Profile: Bangko Sentral ng Pilipinas (BSP),
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangko+Sentral+ng+Pilipinas+%28BSP%29%2C
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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