Our Members
5 Speed Rural Bank, Inc.
Banco Makiling (A Rural Bank)
Banco ng Masa
Batangas Rural Bank for Coop., Inc.
Bolbok Rural Bank, Inc.
Classic Rural Bank, Inc.
Empire Rural Bank, Inc.
Limcoma Rural Bank, Inc.
Lipa Bank, Inc. ( A Rural Bank)
Malarayat Rural Bank, Inc.
Mount Carmel Rural Bank
New Rural Bank of Agoncillo, Inc.
Progressive Rural Bank, Inc.
Rural Bank of Alitagtag, Inc.
Rural Bank of Calaca, Inc.
Rural Bank of Cuenca, Inc.
Rural Bank of Lipa
Rural Bank of Lemery, Inc.
Rural Bank of Padre Garcia, Inc. 
Rural Bank of San Luis, Inc.
Rural Bank of Taal, Inc.
Rural Bank of Talisay, Inc.
Sunrise Rural Bank, Inc. 
Summit Rural Bank of Lipa City, Inc.
Synergy Rural Bank, Inc.
Women’s Rural Bank, Inc.
 
 
 SPONSORS 
LATEST NEWS
BSP terminates rediscounting facility for TBs, RBs, and CBs
By Philippine News Agency
Published: June 14, 2017, 1:31 AM

MANILA – The Monetary Board, the highest policy-making body of the Bangko Sentral ng Pilipinas has terminated the rediscounting widows of thrift banks (TBs), rural banks (RBs), and cooperative banks (CBs) after it noted the lesser need for the facility.

With this, the rediscounting window now has a unified rate of 3.5625 percent for the 90-day facility and 3.6250 percent for the 91-day to 180-day facility.

Previously, the rate of the 1-90 days facility was based on the central bank’s overnight borrowing or reverse repurchase (RRP) facility, which is 3 percent; the 91-180 days is based on the RRP rate plus 0.0625 percent; and the 181-360 days was based on the RRP rate plus 0.1250 percent.

Under the latest MB decision, the 181-360 days facility was also terminated.

The rediscount facility was established in 2013, with universal and commercial banks given a five-year term until 2018; and TBs, RBs and CBs are given a 10-year period or until November 2023, to help the banks improve their deposit mobilization capacities and increase the utilization of other funding sources.

BSP, in a statement, said the Board has noticed that TBs, RBs and CBs are no longer dependent on the facility; thus, the decision to shorten the sunset period extended to them.

“This was validated by the results of a conducted survey of rediscount banks and through consultative meetings with banking groups,” it said.

The central bank on Tuesday reported that availment on the peso-rediscount facility as of May 31, 2017 reached P15 million, 98.5 of which were used for other credits such as housing and permanent working capital while 1.5 percent was tapped for production credits.

Availment in the facility in the first five months this year is lower than the P10.64 billion in the same period in 2016.
_______________________________________________________________________________________
BSP sets uniform bank rediscount rates
By Lawrence Agcaoili (The Philippine Star) | Updated June 14, 2017 - 12:00am

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is set to implement a unified rediscounting window for all types of banks as it decided to terminate the sunset provision for small banks.

The central bank has approved the removal of the sunset period of five years for thrift banks and 10 years for rural and cooperative banks in accessing the BSP’s peso rediscount facilities.

Based on statistical data, the regulator said thrift, rural and cooperative banks are no longer dependent on BSP funds, thereby warranting the shortening of the sunset provision.

“This was validated by the results of a conducted survey of rediscounting banks and through consultative meetings with banking groups,” the BSP said.

Rediscounting is a privilege of a qualified bank to obtain loans or advances from the BSP using the eligible papers of its borrowers as collaterals. It is a standing credit facility provided by the central bank to help banks liquefy their position by refinancing the loans they extend to their clients.

The BSP introduced major reforms in its peso rediscounting policies in 2013 in line with its lender-of-last-resort function. It issued Circular 806 establishing the Rediscounting Window II for thrift, rural, and cooperative banks.

Thrift banks were given a sunset period of five years or until November 2018 while rural and cooperative banks were given 10 years or until November 2023 to access Rediscount Window II at the then existing terms.The sunset period was adopted to allow small banks to use the transition period to improve their deposit mobilization capacities and increase the utilization of other funding sources, thus reducing their dependence on BSP funding over time.“Following the termination of the sunset provision, all banks shall access a unified rediscounting window which shall adopt the terms under Rediscount Window I,” the BSP said.The Rediscount Window I available for big or universal and commercial banks with a rate of 3.5625 percent for loans with a maturity of 90 days and 3.625 percent for 180 days.The BSP also decided to adjust the rediscount rates to the overnight lending rate currently pegged at 3.5 percent plus 0.0625 percent for loans maturing 90 days and the overnight lending rate of 3.5 percent plus 0.1250 percent for 180 days.The regulator also decided to shorten the maximum loan maturity to 180 days from 360 days.Latest data showed total availments under the peso rediscount facility amounted to P15 million in the first five months. Of the total amount, 97.5 percent of the total credits consisted of housing, 1.5 percent went to production credits, and one percent for working capital.
_______________________________________________________________________________________
Perils of an unrestricted rural land market
By: Eduardo C. Tadem, Mary Ann Manahan - @inquirerdotnet12:03 AM June 07, 2017

The Foundation for Economic Freedom (FEF) argues that the fundamental problem of Philippine agriculture is the “restrictions in the rural land market” due to the Comprehensive Agrarian Reform Program’s 10-year prohibition on selling and mortgaging of CARP lands (Inquirer, 5/19/17). Asserting that these restrictions keep farmers poor and prevent them from raising their productivity, the FEF echoes earlier calls for a “property rights regime” with no agricultural land ceiling.

We beg to disagree.

First, contrary to FEF claims, Philippine rural poverty is characterized mainly by lack of access to land and productive resources. A study by Focus on the Global South using official data shows that the top 15 provinces with high poverty incidences also have the highest land redistribution backlog, with 13 of these provinces above the national poverty average of 26.5 percent.

On the other hand, areas with high land distribution accomplishments showed significant positive changes in terms of rural poverty and farm productivity. Studies by the Asia Pacific Policy Center (APPC) reveal that CARP has contributed to the “observed changes in rural welfare in agrarian reform communities (ARC) and amongst landowning farmers.”

The APPC’s Arsenio Balisacan writes that “poverty incidence in ARC barangays went down by 16 percentage points between 1990 and 2000, and figures for 2005 and 2011 show that average yields in ARCs actually improved relative to national averages for all crops—palay, coconut, sugar and corn.” The Annual Poverty Indicators Survey for 1998, 2004, and 2011 indicate that CARP households registered an increase in their average per capita income by 12.3 percent and reduction in poverty incidence by 21 percent compared to the general population and landowning non-CARP households.
Monsod and Piza (2014) report that the average net profit from agrarian reform beneficiary (ARB) farms in ARCs was 10 percent higher than non-ARB farms in ARC, and that a benefit-cost analysis of the ARC model compared to “the mainstream agricultural development strategy” shows a greater net present value (NPV) for the former. Cielito Habito’s 2008 Report Card on Asset Reform Programs shows that 81 percent of ARBs in ARCs reported improvements in the quality of their lives.

Second, it is disingenuous to call for an unrestricted land market regime to solve the Philippines’ agricultural problems. To paraphrase one of this commentary’s authors, under the current dysfunctional capitalist system where noneconomic factors are prominent, where political and agribusiness rural elites are predatory, and where rent-seeking speculation through voracious property developers rules, it would be highly naive to dream of such a land regime.

Besides, existing restrictions “have not prevented private capital from asserting and invoking the ‘laws’ of the market and encroaching on land reform areas and harassing and dislocating legitimate ARBs in particular and other rural populations in general—all in the name of productivity, efficiency, and optimum land utilization.”

More essential, an unrestricted land market with no ownership ceiling “will simply open wide the rural floodgates to modern mutant versions of the unlamented landlord class and reintroduce the oppressive and exploitative social relations that necessitated a redistributive land reform program in the first place. It is precisely this rapacious property rights regime in the rural sector that a truly just and meaningful land reform seeks to prevent, and where it exists, to overturn.”

Social justice and adequate support services for small farmers are the essential components of a productive and ecologically sound agricultural sector, not large-scale profit-hungry private capital. More than ever, land redistribution remains the key to countryside development and national economic progress.

Eduardo C. Tadem, PhD, is president of the Freedom from Debt Coalition and professorial lecturer in Asian studies at the University of the Philippines Diliman. Mary Ann Manahan is senior program officer of Focus on the Global South.
_______________________________________________________________________________________
Bank resources top P14 trillion in Q1
Published May 23, 2017, 10:01 PM
By Lee C. Chipongian

The local banking system reported total resources of P14.08 trillion as of end-March, up 12.37 percent from the same period in 2016 of P12.53 trillion, on a continuously increasing capital and assets-base.

Based on data from the Bangko Sentral ng Pilipinas (BSP), the universal and commercial banks which control more than 90 percent of industry resources, had P12.719 trillion of the total. This was higher compared to end-March 2016’s P11.254 trillion or up 13 percent year-on-year.

Thrift banks, in the meantime, reported total resources of P1.294 trillion at the end of the first quarter, from the same time last year of P1.055 trillion.

The central bank’s data on the total resources of the financial system were gathered from banks’ submissions of consolidated statement of condition.

Overall including non-banks, the entire financial system’s total resources amounted to P17.302 trillion which was more than 2016’s P15.670 trillion or a growth of 10.41 percent.

The BSP’s data on the smaller rural banks and non-banks are not as up-to-date as the big banks and thrift banks.

The latest data was still end-December 2016, which was P231.7 billion for rural banks while the total non-bank resources (investment houses, finance companies, investment firms, pawnshops and securities dealers/brokers) stood at P3.222 trillion as of end-2016.

The BSP currently supervises and monitors 42 universal and commercial banks and 64 thrift banks. There are 479 rural and 29 cooperative banks also under BSP’s watch.

At the end of 2016, the central bank is regulating 10 non-bank financial institutions with quasi-banking functions and 5,557 non-banks without quasi-banking functions, of which 5,420 are pawnshops.

The BSP and the banking sector has been preparing operations and networks for the ASEAN market and financial integration.

BSP Govenor Amando M. Tetangco Jr. continues to emphasize the country’s commitment to the ASEAN Banking Integration Framework, evidenced by agreements signed with Malaysia, Thailand and Indonesia to create so-called Qualified ASEAN banks or QABs.

The new law which permits foreign banks to acquire up to 100 percent of the voting stock of an existing domestic bank, from the previous 60 percent limit, make it easier to establish corresponding QABs from other countries.

The BSP effectively opened up to 40 percent of the total banking assets to foreigners.

Credit watchers such as Moody’s and Fitch Ratings think Philippine banks will benefit greatly from integration judging by their positive reviews. Fitch has tagged the local banking sector as the only industry in the Asia Pacific that has a positive outlook while Moody’s said the local sector is the only one in ASEAN with stable reviews on asset quality, capital, profitability, funding, liquidity and operating environment.
_______________________________________________________________________________________
Fearless forecasts
By: Den Somera - @inquirerdotnetPhilippine Daily Inquirer / 01:06 AM May 23, 2017

The University of Asia and the Pacific (UA&P) held a symposium last week that featured the institution’s well-known founders, former Finance Secretary Jesus Estanislao and chief economist Bernardo Villegas, to talk about “The Next 50 Years of Philippine Economy and Governance.”

The occasion was interesting. Both stalwarts gave very fascinatingly auspicious and positive scenarios to a time that neither of them may no longer be able to actually witness or prove to happen.

Considerations

Good governance and social responsibility have proven pivotal roles toward economic advancement and social betterment. The core values of the Filipino, according to Estanislao, are consonant with the key ethical frameworks that help build positive relationships leading to profitable activities ascribed in good governance and social responsibility. These are love of country and people, patriotism, freedom and responsibility.

Established key core values to successful good governance and social responsibility are patriotism, democracy and accountability.

The steps or fundamental changes to be made to bring the country closer to greater economic heights and better financial landscape are: a) from being looked down upon to being looked up to; b) get high level of respect from building weak and inefficient institutions to strong, capable institutions, and c) from being divided by selfishness to being united.

In this connection, Estanislao called for the practice of personal good governance, integrity and ethics. These are to start in the family and echoed further in the schools, other entities and their alliances, fostering solidarity and teamwork as well.

Next are awareness and proper appreciation of our resources and the practice of the Bayanihan spirit. A good grasp on our resources will both lead to a realistic appreciation in their utilization and exploitation as well as improve economic and financial policies with neighbors in the Association of Southeast Asian Nations (Asean) region, in East Asia and the world.

Estanislao said he found that the main strategy to accomplish the goal of economic and social advancement would be the Bottom-Up approach, in addition to devising a 10-year program that should be reviewed every three years.

The ordinary citizens, like you and me, should take charge because the responsibility of acting on behalf of society as well as the obligation to keep a balance between the ecosystem and the economy are better achieved when voluntarily accepted rather than when imposed by the government to the individual.

Villegas, for his part was very optimistic that the country would hit its economic and social goals. He said that where the country would go has been the result of the positive contributions of the past Presidents—from Marcos to the present time.
_______________________________________________________________________________________
How will companies survive in digital age? More than being techie, Ateneo’s Cielito Habito says customer is king

How will businesses survive amid cutthroat competition when surveys show that the lifespan of big companies has been falling?

Former socioeconomic planning secretary Cielito Habito believes companies need to learn the importance of listening to their customers and being attuned to their needs so they can thrive in the ever-changing business landscape.

Habito, who teaches economics at the Ateneo de Manila University, cited Procter and Gamble, Banco de Oro and CD-R King as some of the businesses which continue to succeed simply because they continue to innovate.

In his May 20 column for the Philippine Daily Inquirer, Habito recalled that P&G succeeded in India because it developed a razor for men that did not need to be cleaned by water, and is cheap enough.

BDO, meanwhile, changed the banking landscape by offering longer banking hours and being open on weekends.
CD-R King managed to survive the obsolescence of CDs– which used to be its main product– by offering other gadgets and tech items.

With technological innovation and kickstarter companies constantly threatening the survival of more established brands, Habito said businesses must bear in mind that customer is king.

“The days of sweeping the needs of customers under the rug for profit are numbered. Not only are there alternatives all over just waiting to fill the gaps, unaddressed customer needs also come under close scrutiny,” he said.
_______________________________________________________________________________________
LandBank allots P1b for electric jeepneys
posted May 02, 2017 at 09:25 pm by Julito G. Rada

State-run Land Bank of the Philippines put up a P1-billion credit facility for a pilot project covering the replacement of an initial 650 public utility jeepneys with electric vehicles costing P1.4 million to P1.6 million per unit.

Finance Secretary and LandBank chairman Carlos Dominguez III signed a memorandum of understanding with Transportation Secretary Arthur Tugade for the jeepney modernization program. LandBank president Alex Buenventura and Land Transportation Franchising and Regulatory Board chairman Martin Delgra III witnessed the signing.

Dominguez said the jeepney modernization program of the government would require public diplomacy to convince drivers, operators and the riding public that it was time to replace the old vehicles with cleaner, healthier, safer and more fuel-efficient electric cars. He said around 220,000 PUJs across the country needed to be modernized.

“We will try to replace 220,000 aging and inefficient jeepneys nationwide with new vehicles. The replacement vehicles will help clear the air literally, make commuting safer for the public and contribute to a more rational public transport system,” Dominguez said during the signing ceremony in Davao City.

Dominguez said the government should carry out the difficult task of convincing PUJ drivers and operators as well as the riding public that the “well-loved” Philippine jeepney has become an “inefficient dinosaur” that “must now be relegated to the museum.”

He said that in the past, there were several attempts to modernize the country’s public transport system, among them a plan by the Development Bank of the Philippines 10 years ago to replace passenger buses plying Edsa with new ones running on liquefied natural gas.

All the other previous efforts although financially feasible for the bus companies were met with resistance.

“There will be political resistance, no doubt, from those who do not wish change. We will have to conduct effective public diplomacy to raise the acceptance of this program. We must convince the jeepney drivers and operators that this is the way to go. They must understand the financing package will make the shift affordable,” Dominguez said.

Dominguez said he was “confident the government agencies participating in the program have the political will to see this program through.”

“It will be an important contribution to fighting climate change. It will help decongest our exhausted roads. It will make commuting a more pleasant activity for our bedraggled commuters,” he said.

Dominguez said the three agencies primarily involved in the jeep modernization program―the DoF, DOTr, and LandBank―pooled their talents and resources to realize the goal of bringing the country’s public transport system to the 21st century.

“Everywhere in the world, countries are looking into new transport modes to keep the air clean, move people efficiently and decongest the roads,” Dominguez said.

“In a few short years, electric cars are expected to outsell conventional vehicles running on fossil fuel,” he said.
_______________________________________________________________________________________
BSP allows rural, cooperative banks to invest in marketable bonds
By Lawrence Agcaoili (The Philippine Star) | Updated May 9, 2017 - 12:00am

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has allowed rural and cooperative banks to invest in readily marketable bonds and other debt securities without prior approval from the regulator.

BSP Governor Amando Tetangco Jr. has issued Circular 960 amending certain provisions of the Manual of Regulations for Banks (MORB).

The amendments, Tetangco said, allows rural and cooperative banks to acquire readily marketable funds and other debt instruments without prior approval from the BSP.

He said the bonds and other debt instruments should have complied with the new rules on registration of commercial papers.

Furthermore, the BSP chief added the investment should not be held for trading purposes.

Rural and cooperative banks should conduct a continuous self-assessment of their compliance and should submit one-time notarized certification that the pre-qualification requirements under the MORB have been complied with 10 calendar days from date of initial investment.

On the other hand, thrift banks could invest in evidence of indebtedness thatare not registered with the Securities and Exchange Commission (SEC) but are not readily marketable securities.The regulator said the classification, accounting procedures, valuation, sale and transfers of investment in debt securities and marketable equity securities should be in accordance with the guidelines.

Tetangco said rural banks could also offer other banking services as well as engage in the buy and sell of foreign exchange.

Cooperative banks could also perform any or all of the banking services offered by rural banks.

The regulator warned it would impose penalties and sanctions on BSP-supervised financial institutions and concerned officers found violating provisions of the guidelines.

A fine ranging between P1,000 and P20,000 would per day be imposed on rural, cooperative, thrift, commercial, and universal banks reckoned from the date the violation was committed.

Concerned officers face reprimand on the first offense while subsequent offenses would merit a 90-day suspension without pay.

Latest data from the BSP showed the number of banks declined to 602 last year from 632 in 2015 consisting of 42 universal banks, 21 commercial banks, 60 thrift banks as well as 500 rural and cooperative banks.

The BSP ordered the closure of 22 problematic banks last year as part of efforts to weed out weak players and to pursue the consolidation among major players.
_______________________________________________________________________________________
Our stubborn rice policy
By: Cielito F. Habito - @inquirerdotnetPhilippine Daily Inquirer / 12:08 AM April 18, 2017

I have written so much over the years, including in this column, about our deeply flawed policies on rice. It has been tiring and exasperating. I’ve had the chance to advise several secretaries of agriculture, whether officially or otherwise, starting with Finance Secretary Sonny Dominguez, when he held the agriculture portfolio in the Cory Aquino Cabinet three decades ago. It seems that most of those who have occupied that position quickly take to heart the seemingly widely accepted proposition that rice is a “political crop” in the Philippines—and that this gives license for them to perennially defy sound economics in setting the country’s policies on the crop.

Today we are seeing it play out again, with almost exactly the same timeworn script, as if we simply refuse to learn the lessons from history and from our neighbors. It is said that the success of a Philippine secretary of agriculture (and even president) is measured by the Filipino public on the basis of whether he/she can achieve rice self-sufficiency for the country. The fact is, the more we believe in that, the more that success in managing our agriculture, raising farm incomes, and bringing down high levels of rural poverty and malnutrition will simply keep eluding us.

These days, the commodity is in the limelight again, after fellow economists and former economic policymakers belonging to the Foundation for Economic Freedom publicly expressed concern over recent extreme pronouncements from the President himself, obviously ill-advised. Their message says what I and other economists have been saying time and again about our self-destructive rice policies. The problem with our restrictive rice policy is that it makes rice unduly expensive to 103 million rice consumers, supposedly for the sake of 2.4 million rice farmers. This makes it antipoor and has led to large numbers of food-insecure Filipinos and alarming rates of malnutrition and stunting (33.5 percent!) among young Filipino children, leading to irreparable lifelong impairment of brain and physical development. Yes, most of our estimated 2.4 million rice farmers are poor, and most certainly deserve help. But we should bear in mind that with a poverty rate of over 21 percent, there are nearly 10 times as many poor Filipinos, including rice farmers, who studies have consistently shown to
be mostly net buyers of rice as well. The numbers of our poor could be significantly reduced if only they could buy their food staple at prices similar to what our Southeast Asian neighbors do.

There is so much I can say and reiterate, but let me distill it down to what’s wrong about what we have been doing in rice. We have for too long insulated the domestic rice market from the international market for the commodity by tightly controlling imports via the National Food Authority (NFA). But we have a long enough history with this to know that the government is a bad judge on when or how much to import, which only led to highly volatile prices for rice. The age-old recommendation to remove rice quantitative restrictions (QRs) via the NFA monopoly on rice importation does not actually imply letting rice get in duty-free, but to change the form of protection to an import tariff. Done right, we need not see a sudden domestic price fall with the lifting of rice QRs. The government has no business being in the rice business, especially if it’s a losing proposition that bleeds the national treasury of billions of pesos we taxpayers all pay for.

There is a much better way. We should have long ago permitted the private sector to import the commodity subject to an import tariff that sets domestic prices to wherever we want it, balancing the interests of farmers and consumers. Not only would we stop government coffers from bleeding due to the NFA’s perennial losses from its commercial operations (P167 billion at last count); it will actually gain substantial revenues from the tariff on rice imports, that can then be used to help our rice farmers raise productivity, and lower costs. But first we have to put aside the obsession with producing all our rice ourselves, until such time that we can produce it at the same costs our neighbors do.
_______________________________________________________________________________________
Days of loan sharks numbered, says DTI
By: Roy Stephen C. Canivel - @inquirerdotnetPhilippine Daily Inquirer / 12:10 AM April 19, 2017

The Department of Trade and Industry (DTI) said that it had already ironed out the guidelines for the government’s implementation of Pondo sa Pagbabago at Pag-asenso (P3), a financing program that is expected to put loan sharks out of business.

However, the DTI did not give a timetable for the public release of the guidelines, although the program was already launched in Leyte, Occidental Mindoro and Sarangani in January.

P3 is a P1-billion financing program intended to give micro-, small- and medium-sized enterprises better access to finance and to reduce their cost of borrowing, with the government prioritizing the country’s 30 poorest provinces.

“As funds for the Pondo sa Pagbabago at Pag-asenso (P3) expected to be released anytime soon, the Department of Trade and Industry (DTI) and its microfinancing arm Small Business Corporation (SB Corp) have ironed out the guidelines of its implementation that will help microentrepreneurs throughout the country,” DTI said in a statement.

If successful, the project is expected to expand and be able to loan P1 billion for every region in the country.

DTI said that the fund for the program would come from the Office of the President and would be coursed through SB Corp., which would then accredit partner institutions such as nonbank MFIs, cooperatives and associations to serve as conduit for the P3 funds.

DTI said the program would require minimal documentation requirement, a one-day processing of application and a low interest at 2.5 percent a month as the collection for the payment might be done on a weekly or daily basis.
_______________________________________________________________________________________
Neda chief disagrees with Piñol
By: Ben O. de Vera - Reporter / @bendeveraINQPhilippine Daily Inquirer / 12:20 AM April 19, 2017

Economic managers are pushing for rice importation by the private sector to temper rising prices of the Filipino staple food.

“The stand of the economic team is timely rice importation because it’s not possible, at least in the near- to medium-term, to be [rice] sufficient,” Socioeconomic Planning Secretary and Ernesto M. Pernia told reporters on the sidelines of The Dutertenomics Forum yesterday.

Asked if economic managers preferred private or government-to-government importation, Pernia, who heads state planning agency National Economic and Development Authority, said it should be the private sector.

“With private sector importation, the government does not spend. If it’s government-to-government, it adds to the debt of the NFA, which is already P211 billion,” added Pernia, referring to state-run National Food Authority, the agency mandated to stabilize both the supply and prices of rice.

Pernia said the economic managers would inform the President about their position with regards this issue.

For Finance Secretary Carlos G. Dominguez III, he said he was concerned about keeping inflation low.

“As finance secretary I am very interested to keep the inflation rate down, particularly inflation on rice because it hits the poor people harder than the more affluent people,” explained Dominguez, who heads the Duterte administration’s economic team.

The interagency NFA Council reportedly met yesterday but the economic managers said they have yet to know what transpired during the meeting.

Pernia earlier told the Inquirer that among the measures that could mitigate rising prices of basic goods included “passing the law that can tarrify rice in lieu of qualitative restriction (QR)” as well as “reforming the National Food Authority to allow timely importation to forestall impending shortages.”

Pernia said Neda was amenable to the proposal of state-run think tank Philippine Institute for Development Studies (PIDS) to slap a 35-percent tariff on rice when the import quota system expires by the middle of this year.

Besides tarrification, PIDS was also pitching subsidies to farmers to improve agricultural productivity.
_______________________________________________________________________________________
Banks’ managed assets now total P2.84 trillion
Published April 4, 2017, 10:01 PM
By Lee C. Chipongian

Banks’ trust and investment management units have assets amounting to P2.843 trillion at the end of 2016, up 11.18 percent compared to the previous year’s P2.557 trillion, data from the central bank show.

The 41 universal and commercial banks control most of these assets or P2.803 trillion of total, of which P1.494 trillion are net financial assets, P715.6 billion are deposits in banks and P284.396 billion are cash and due from banks.

Overall, including thrift banks’ managed assets, the domestic banking system had total net financial assets of P1.517 trillion, deposits in banks of P724.215 billion and cash and due from banks of P286.985 billion.

The banking system’s trust holdings amounted to P1.701 trillion from P1.544 trillion in 2015 while unit investment trust funds (UITF) totaled P825.129 billion from P670.89 billion. Trust holdings in the pre-need sector was almost unchanged at P110.36 billion compared to the previous year’s P110.46 billion.

The country’s biggest bank, the SM Group’s BDO Unibank, Inc., earlier reported consolidated trust assets under management (AUM) of P1 trillion for 2016, the first local bank to breach the P1-trillion level. The bank’s AUM increased by 12 percent year-on-year from P917 billion in 2015.

“2016 was a banner year for BDO both for business growth and new product development in terms of trust assets,” said Ador A. Abrogena, BDO executive vice president and trust officer. The AUM is the total of BDO’s Trust and Investments Group with P755 billion and another P273 billion from a subsidiary of BDO Private Bank Wealth Advisory and Trust Group.

BSP Governor Amando M. Tetangco Jr. in the meantime, said banks’ AUM could climb to R4 trillion as investors and fund managers gain more assurance that the economy’s growth is sustainable.
_______________________________________________________________________________________
Only 2 out of 10 have deposit accounts - BSP
Tuesday, March 14, 2017
By JEANDIE O. GALOLO

ONLY two in ten Filipino households have bank deposit accounts, a study by the central bank has shown.

To increase the number, stakeholders in government are proposing that the beneficiaries of the conditional cash transfer (CCT) or Pantawid Pamilyang Pilipino Program, who constitute a large number of the unbanked population, be allowed to directly save through their cash cards.

“We have to encourage these people to save,” said Bangko Sentral ng Pilipinas (BSP) Cebu Director Leonides Sumbi during the presentation of the results of the 2014 Consumer Finance Survey to local stakeholders at the BSP Cebu Regional Office yesterday.

Based on the quadrennial survey, only 14 percent of Filipinos have deposit accounts in banks, and this is even lower in Central Visayas, with 13.1 percent.

Cash cards issued by the Department of Social Welfare and Development (DSWD) through banks like the Land Bank of the Philippines (LBP), rural banks, and microfinance institutions, are purely for “cash out purposes,” and do not serve as deposit accounts, said Land Bank Cebu vice president Marilou Cardenas.

The problem with this, according to Department of Trade and Industry (DTI) 7 Director Asteria Caberte, is that CCT beneficiaries spend it mostly on non-essential items when they are not given the option to save.

The goal of the CCT, she said, is to transcend the lives of the beneficiaries by first giving them grants until they become self-sustaining families.

But in some cases, which she personally witnessed, the money is being used for less important things like buying pirated DVDs for entertainment.

If the cash cards can be used as deposit accounts, both Caberte and Sumbi noted that this will encourage the unbanked population to save, no matter how minimal, without the need to go through the usual and sometimes tedious process of opening a bank account.

BSP Economic Statistics Director Rosabel Guerrero said some of those who do not have deposit accounts claim the requirement to keep a maintaining balance puts them off.

“We will raise this to the higher management (in BSP),” promised Sumbi, referring to the possibility of having a cash card and a deposit account in one for CCT beneficiaries.

In Central Visayas, there are 192,000 CCT beneficiaries.
_______________________________________________________________________________________
Economic forecasts for current year
Published March 9, 2017, 10:00 PM
by Dr. Bernardo M. Villegas

I have been joining road shows organized by the First Metrobank Investment Corporation (FMIC), the biggest local investment bank, in various cities of the Philippines as well outside the country. Business people in various regions highly appreciate this service of FMIC especially in these times of uncertainties in both the domestic and global economies. Backed by research of economists of the University of Asia and the Pacific, the top executives of FMIC have shared freely with their clients and others valuable information that is needed by every business to plan their operations for the current year and beyond. The theme of the entire briefing is “Riding the Winds of Change.” I would like to share with my readers the key data on the Philippine economy that have been presented in these road shows.

The GDP forecast of 7% to 7.5% for 2017 is on the high side of the government target, which is 6.5% to 7.5 % for the entire year. FMIC expects the Philippine economy to sustain its growth in 2017 driven by higher capital investments as the government ramps up infrastructure spending, while the proposed tax reforms (expected to be in place by June of this year) can buoy consumption spending as the middle-income households are the major beneficiaries of income tax reduction. Consumer spending will continue to benefit from OFW remittances which will sustain its growth of 2% to 4% annually and enhanced by the depreciation of the peso which is expected to average for the year P51 to $1. Inflation is expected to moderately rise by 2.8% to 3.2% during the current year. The tax reforms are seen to be inflationary. According to the Department of Finance, the comprehensive tax reforms can have a 1.8% inflation effect due to its stimulative effect resulting from higher disposable income of middle-income households. Oil prices are not likely to rise beyond $60/barrel due to increased supply coming from shale gas in the United States. According to the BSP, inflation will range between 2% to 4% for the whole year.

FMIC expects exports to recover in 2017. The strengthening of the US economy, which accounts for 16% of the country’s total exports, and the moderate recovery of the global economy are expected to lift Philippine exports growth to 5%-8%. The country’s improved relationship with China (our third largest export market) is also expected to further boost exports. The BSP is more conservative in its forecast of export at 2%. Imports will be growing at double-digit levels of 10% to 14% as capital spending rises (mainly due to infrastructure projects) as well as higher oil imports. Infrastructure spending is expected to be 5 to 5.5% of GDP. BSP expects imports to rise at 10%. The exchange rate will average at P51 to $1 as the peso comes under pressure from a strengthening US dollar with expected higher growth of the US economy and several increases in US interest rates.

Interest rates in 2017 are expected to rise by 20 to 50 basis points from its year-end 2016 level. The short-end of the curve is expected to go up by 20 basis points, the belly by 30 basis points and the long-end by 50 basis points. These forecasts are in line with expectations of higher policy rate in the US and the PH, increased spending for infrastructure, higher inflation and risks coming from China’s economy and uncertainties in the policies of President Donald Trump of the US. The National Government Debt to GDP will be at a low of 42 to 43% (one of the lowest in the region). The Bank’s experts on the stock market are making the fearless forecast that the index will be at 7,500 by year end, a projection assuming an Earning Per Share growth rate (forward) of 8% (based on Bloomberg estimate) and Price Earning ratio of 17x. This implies an upside of 10% from the year-end PSEI level of 6,840 (as of December 29, 2016).

As regards capital market issuances, FMIC expects a flurry of companies tapping the capital market in the first semester of the year. There will a window for new equities issue in 2017. Valuation will be very important. Issuers are expected to be companies who are market leaders in their sector and have strong track records. Merger and Acquisition (M&A) valuations will become reasonable given market development. It would be advisable for companies to acquire foreign and domestic targets. As rates go up, weak companies are expected to face more challenges, creating opportunities for consolidation. FMIC plans more road shows, not only in key Philippine cities, but in leading Northeast Asian cities in China, Taiwan, South Korea and Japan, the main beneficiaries of increased interest of Philippine firms following the “rebalancing strategy” of President Duterte. These are the countries that will most likely help the Philippines in implementing major infrastructure projects and in giving a big boost to manufacturing.
_______________________________________________________________________________________
BSP to ease know-your-customer rule for rural clients
By Bianca Cuaresma - MARCH 9, 2017

The Bangko Sentral ng Pilipinas (BSP) looks to give banks greater flexibility in observing the know-your-customer (KYC) rule, this time allowing financial consumers to submit identification documents (IDs) online.

In a recent chance interview, Deputy Governor for the Supervision and Examination Sector Nestor Espenilla Jr. said the Monetary Board (MB) recently approved so-called updates on antimoney laundering, including salient amendments to customer acquisition.

“So, in particular, what I find important and exciting there is [this] would allow flexibility on the online KYC. [This] is actually going to be a major factor that can facilitate the onboarding of new customers, especially unbanked customers, customers in remote areas and customers who don’t necessarily have government IDs,” Espenilla said.

He further said government IDs and other official documents for identity verification will be allowed through electronic photographic images and video-messaging service under certain conditions.

Espenilla said the MB already approved the amendments and should soon be signed by BSP Governor Amando M. Tetangco Jr. anytime soon.

Espenilla expects the new rules and regulations to encourage more financial consumers to reach out to banks and boost the country’s overall banking penetration rate.

Latest data from the National Strategy for Financial Inclusion (NSFI) survey show that while Filipinos exhibit a widespread or 98.3-percent awareness of banks, only about a third, or 31.3 percent, have an account at a formal financial institution, whether this be a regular deposit account or a microdeposit account.

Also, results of the survey show the average length of time to travel to the nearest actual bank branch in the Philippines is 26 minutes.

A two-way trip to the nearest actual bank branch costs an average P52. This cost rises exponentially in poorer and more rural areas of the country.
_______________________________________________________________________________________
Substitute for ‘5-6’ loan rate
By: Raul J. Palabrica - @inquirerdotnetPhilippine Daily Inquirer / 12:12 AM March 06, 2017

Indian nationals in the country who are engaged in “5-6” lending seem to be taking seriously President Duterte’s order to the authorities to put an end to that quasi-banking activity.

According to reports, more than 200 people who are involved in this underground business have come out in the open and applied for registration at the Securities and Exchange Commission (SEC).

If these applicants are able to comply with the capital and documentary requirements, the SEC will issue to them a certificate of authority to operate as financing or credit companies.

But once registered, they have to file periodically with the SEC certain documents so the latter can monitor, at least on paper, their continuing compliance with the law.With the certificate, they no longer have to do business in the shadows or be obliged to grease the palms of barangay officials to allow them to go door-to-door in offering credit facilities to potential clients.

For the Indian moneylenders, registration is a small price to pay for the opportunity to engage in a business that has low operating costs but high returns, although fraught with the risk of getting mugged (or worse, killed) when they do their collection rounds.

Putting a name and a face on the people who make credit available to financially-challenged Filipinos at usurious interest is only one of many steps that have to be taken to be able to comply with the President’s directive.

No doubt, the P1 billion that the President has promised to lend to micro and small enterprises at 2-percent-a-month interest, with P2,000 as the minimum loan, will be helpful to their intended beneficiaries.

But unless the government can come up with a viable alternative to the easily available “financial assistance” that ‘5-6’ operators provide to cash-strapped Filipinos in depressed areas or public markets, the P1 billion will not suffice to drive them out of business.

In fact, it is doubtful if those moneylenders will change the manner they do business or lower the interest rates they impose on their loans simply because they registered their business with the SEC.

Like many unscrupulous Filipino businessmen, expect those informal lenders to pay lip service to the duties and responsibilities that go with a certificate of authority to operate a financing company, and instead look to the loopholes in the law that can help them earn handsome profits without incurring any liability.

The next item that should be in the government’s agenda on this matter is the resolution of the issue of what interest rates are considered reasonable and therefore permissible, and what are usurious and therefore prohibited.

Bear in mind that the Usury Law is no longer in effect and there are no officially-prescribed limits on interest rates for loans. The rule of the thumb is, the parties to a loan agreement are free to agree on the rate of interest to be paid for the credit granted.

The Supreme Court has ruled that the determination on whether an interest rate is reasonable or usurious depends on the terms and conditions of the loan, or the circumstances under which it was incurred.

There is no hard and fast rule on this issue. A 15-percent interest on a particular loan may be okay, but may be considered unconscionable in another on account of, say, the conditions it was incurred. In other words, the matter has to be decided on a case-to-case basis.

On this point, the Department of Trade and Industry, not the SEC, has to decide on the range of interest rates that moneylenders can legally impose on the loans or credit accommodations (e.g., purchase of appliances) they extend to their clients based on, among others, the amount involved, payment period, object of the loan, and paying capacity of the debtor.

There can be no one-size-fits-all interest rate for this type of moneylenders. It’s only fair that they get a fair return on their investments considering the risks they take in extending credit to people they hardly know who live in places that the police sometimes fear to enter without backup.

That’s the easy part. The bigger problem is how to effectively monitor their activities and make sure they comply with the law considering the limited manpower of the government’s regulatory agencies.
_______________________________________________________________________________________
Landbank pushes rural bank consolidation
Offers to finance 51% of joint-venture company to compete with bigger banks
By: Doris Dumlao-Abadilla - Reporter / @philbizwatcher
Philippine Daily Inquirer / 12:26 AM February 27, 2017

The state-owned Land Bank of the Philippines (Landbank) has proposed to consolidate a critical mass of the country’s small rural banks into one big entity that can rival universal banks in terms of capitalization.

Landbank is willing to contribute fresh capital to own 51 percent of the proposed “Apex Rural Bank,” which will have an authorized capital of P5 billion and become the vehicle for consolidation, Landbank president Alex Buenaventura said in an interview with the Inquirer.


Bunaventura said he submitted the proposal in January to the Rural Bankers Association of the Philippines (RBAP), which has more than 370 member-banks. The Landbank chief has given the rural banks two years to consider this proposal, which aims to help achieve long-term competitiveness and sustainability among rural banks.

“I told RBAP that instead of Landbank branching in these areas, why not put up a joint venture bank?” Buenaventura said, adding that the rural banks have until end 2018 to consider the offer.

Rural banks that will join the proposed Apex Rural Bank can contribute their business in exchange for shares in the bigger institution. Landbank can adjust its ownership depending on how much net assets the participating rural banks can pool.

“Apex is not an acquisition bank. It is a consolidation bank. There’s no selling of shares [for cash]. We need the resources, the branches, the human resource, the critical mass. It’s really a partnership,” Buenaventura said.

Being a former rural banker himself, Buenaventura knows the challenges of being a niche banking player. For two decades, he served as president of One Network Bank (ONB), a leading rural bank in the country. He led ONB through its consolidation journey from the synergy of three rural banks— the Rural Bank of Panabo (Davao), Network Rural Bank (Davao) and Provident Rural Bank of Cotabato. In 2014, the Consunji family sold ONB to BDO Unibank.

ONB would not have been competitive if not for its big capital that amounted to P4.8 billion at the time BDO bought the bank, Buenaventura said. “So big capital really is needed for a bank to be sustainable. And big capital to me is at least P5 billion,” he said.

Buenaventura estimated that average rural banks in the country would typically have a net worth between P50 million and P700 million. If participating banks do not have enough net assets to meet the 49-percent capital for Apex Bank, he said Landbank might have to increase its stake beyond 51 percent.

The consolidation scheme would also give weak rural banks a chance to find a “white knight” in Apex Bank, Buenaventura said. But even for the stronger banks, he said this would be an opportunity to be part of a more competitive entity, especially with the big banks now encroaching on rural banks’ traditional territories.

Buenaventura said Apex Bank could also upgrade the image of the rural banking industry, which had been stigmatized by a wave of closures in previous years.

For Landbank, Buenaventura said the proposed investment in Apex Bank would be an “inclusive branching strategy,” giving it a footprint in more cities and municipalities and thereby boosting its capability to pursue lending in the countryside.
To date, Landbank has about 362 branches nationwide, mostly in cities and first-class municipalities. “We definitely need to have presence in unserved areas for inclusive banking purposes,” Buenaventura said.

The Landbank chief said he had mentioned the Apex Bank proposal to the Bangko Sentral ng Pilipinas (BSP), which was supportive given its thrust to encourage consolidation in the banking industry.

Based on the BSP’s latest report on the banking system, rural and cooperative banks have a combined network of 1,707 branches as of the first semester of 2016. However, the BSP also noted that universal and commercial banks have extended their reach to areas considered as the home turn of rural banks, namely first to fourth class municipalities.
_______________________________________________________________________________________
BSP shuts down Iloilo rural bank
By Lawrence Agcaoili

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of another rural bank as part of continued efforts to weed out weak players from the banking sector.

The BSP’s Monetary Board issued a resolution prohibiting Rural Bank of Barotac Viejo (Iloilo) Inc. from doing business in the Philippines.

The rural bank is based in Barotac Viejo in Iloilo City and has two branches in Jaro and Concepcion.
This is the second problematic bank ordered closed by the central bank so far this year after Countryside Cooperative Rural Bank of Batangas last month.

State-run Philippine Deposit Insurance Corp. (PDIC) has been directed to act as receiver and to proceed with the takeover and liquidation of both banks in accordance with Republic Act 3591 or the PDIC Charter as amended by RA 10846.

A bank that has been placed under liquidation should in no case be re-opened and permitted to resume banking business. Furthermore, the law expressly provides that banks closed by the Monetary Board should no longer be rehabilitated.

Upon placement of any bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated.

Accordingly, the directors, officers, and stockholders are barred from interfering in any way with the assets, records and affairs of closed banks.

The BSP ordered the closure of 22 problematic banks last year, eight more than the 14 banks closed in 2015.

BSP Deputy Governor Nestor Espenilla Jr. earlier said the country’s banking system has evolved over the years with the closure of some players as well as the mergers and consolidation of the others.
_______________________________________________________________________________________
Knowing how much your business is worth
Jessie CarpioJessie Carpio
15 Feb 2017

How do I value my company, a client recently asked me. The client’s company has been in the red, losing money for years, but a buyer is still interested. Many of the entrepreneurs have been asking the same question: how does one figure out the value of a business? For a famous example, how did Jollibee come up with a P3 billion price for a 70 percent stake in Mang Inasal way back in 2010?

I knew of entrepreneurs looking for investors but had no idea how much percentage stake they were supposed to give for the amount of money they desired. There are also many business owners who are already expecting to retire on the funds generated by the sale of their businesses. Since they do not know how much their business is worth, they are apprehensive that they might be pursuing a pretty risky retirement strategy.

Given the importance of business value to strategic planning, one would imagine that every business owner already knows the value of his business. However, I’ve found that this isn’t always the case. In fact, since business owners are so close to their businesses and know how much hard work, time and money went into building them up, they are often naturally inclined to over-inflate the values.

There are a lot of reasons to get a business valuation. In an article, Grant Thornton has opined that, given the current economic realities, privately held businesses (mostly dynamic companies in the small and medium-sized categories) in all sectors are looking for ways to strengthen their performance, and a valuation might just be the best starting point. Getting to the value is important, but what many often overlook is the strategic advantage in understanding your “value drivers.” In other words, it’s essential for business owners to understand the factors that enhance the business value so they can focus on these metrics to drive their growth.

Determining a business value is as much an art as a science. Fundamentally, the value of a business lies in its ability to generate future cash flow. One of the most common places to start is an income-based approach; i.e., estimating the expected future cash flows and then taking a hard look at the risks to determine an appropriate discount or capitalization rate.

This kind of approach looks at the company’s business fundamentals and how the company derives its economic benefits and when such benefits can be earned. Since the economic benefits are expected to be derived in the future, there is an element of risk that has to be factored in, usually in the form of either a capitalization rate or a discount rate.

Another method is the asset-based approach, which means adding up the values of the underlying assets (minus all liabilities) of the business. The basic premise is that if one has to engage in a similar existing business venture, one has to acquire all the assets and, in the process, incur liabilities. The challenge in this approach is the valuation of the assets and liabilities, especially since there are “intangibles” in a company’s business that might not be captured in the statement of financial position or balance sheet. An “intangible” can be an exceptional client service or the effective execution of their strategy.

A market-based approach, which compares a business with others within the same industry, is also commonly used. This approach looks at a recent sale or purchase transaction of a similar business, with an adjustment to the rates given certain intrinsic values of the business. This is where market forces come in, as we have to look at the price a buyer is willing to pay and which a seller is willing to accept. However, for privately held businesses, this can be difficult. Some companies use a valuation formula to simplify the process, but this can often be inaccurate or overly restrictive.
Once you’ve run all these numbers, you also have to take into account some more intangible factors, such as the changing industry, market trends, or the impact of management structures. And then, of course, there are brand strength, customer and supplier relationships, name recognition, patents and trademarks, and proprietary technology, just to name a few.

Once you’ve done all these, you have the magic number—or do you? While value tends to fall within a range, there is never just one value for a business. Buyers will determine their own value—one of the reasons why there are often differences between the “notional value” and the street value when it’s actually put up for sale.

So, what’s the bottom line? Don’t wait until you’re ready to sell to get a valuation. Understand the business value today (mainly the business drivers) so that you can plan for growth tomorrow. Who knows, you might be the next Mang Inasal.

Jessie Carpio is a partner and head of BPS/Outsourcing. He is also the president of P&A Grant Thornton Outsourcing Inc., an entity wholly owned by P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory, and Outsourcing firms in the Philippines, with 21 Partners and over 800 staff members.

As published in Manila Times, dated 15 February 2017
_______________________________________________________________________________________
BSP urged to give banks leeway for agri sector
Posted January 30, 2017 at 12:01 am
by Rio N. Araja

CAMARINES Sur Rep. Luis Ray Villafuerte is urging Bangko Sentral ng Pilipinas to give more leeway to banks to enable them to comply with the Agri-Agra Law.

“I understand that banks are having a hard time complying with the provisions of the law because of the status of the credit worthiness of our farmers, who cannot meet the collateral requirements for loan applications. As for the agrarian reform communities, most banks, even rural banks, do not want to accept the certificates of land ownership awards as collateral,” he said.

He said the BSP should allow more alternative forms of compliance to encourage banks to comply with the provisions of the Agri-Agra Law or Republic Act 10000.

He reacted to reports that loans extended by banks to the agriculture sector in the first nine months of 2016 amounted to P405.78 billion for a 12.96-percent compliance ratio or below the required 15-percent.

The compliance ratio of the banking system also fell way short of the 10-percent threshold for agrarian reform credit, he said, adding the banks extended loans amounting to only P29.98 billion for a compliance ratio of a paltry 0.96 percent.

Villafuerte noted while the Duterte administration had scored a “very good” satisfaction rating of +61 in the 2016 fourth quarter survey of the Social Weather Stations, its efforts in “ensuring that no family will ever be hungry” was a mere “good” at +34, which was down from a “good” grade of +37 in the September survey.

Its efforts in “fighting inflation” was only “moderate” at +25 in the fourth quarter, which was a grade down from “good” at +33 in September.

Such tracking poll results would only indicate the government must make initiatives to strengthen the farm sector and stabilize food prices, Villafuerte said.

He said the BSP could consider the recommendation of the Bankers’ Association of the Philippines to allow banks to enter into a public-private partnership that would benefit the agriculture sector as part of their compliance with the mandated agri-agra loan threshhold.

Land Bank of the Philippines president Alex Buenaventura has also come up with a proposal

to partner with commercial banks to help small farmers establish “corporatives” as another alternative, he added.

Under the Agri-Agra Law, 25 percent of the banks’ total loanable funds must be set aside for agriculture and fisheries in general, of which at least 10 percent should be made available for agrarian reform beneficiaries.

The old law, Presidential Decree 717, allowed bank loans for the housing and education sectors as alternative forms of compliance.

But the revised law, Republic Act 10000, has limited the alternative forms of compliance to borrowers who intend to use their loans for initiatives that shall also benefit the agriculture sector.

Under RA 10000, the BSP has put in place a stricter monitoring system to oversee compliance and imposed penalties on banks that fail to meet the law’s provisions, which led many lending institutions to opt to just pay the penalty.

“The government has chronically failed to boost farm yields, let alone attain self-sufficiency in major crops, such as palay, because of insufficient irrigation supply and lack of credit facilities available to small farmers,” Villafuerte said.
_______________________________________________________________________________________
BSP grants relief measures to banks hit by typhoon ‘Nina’
Published January 24, 2017, 10:01 PM
By Lee C. Chipongian

Banks and non-bank financial institutions located in areas affected by typhoon “Nina” last Christmas Day are granted regulatory relief measures from the central bank for a “defined period.”

The Bangko Sentral ng Pilipinas (BSP) has approved regulatory and rediscounting reprieve for banks with head offices, branches/extension offices and microfinance-oriented banks in areas identified by the National Disaster Risk Reduction Management – upon the recommendation of the Regional or Local Disaster Risk Reduction Management – as being under a state of calamity. These covered Regions 4-A, 4-B, 5 and 8.

“These measures will be in effect for a defined period and covered by additional specific and other prudential conditions,” said the BSP yesterday.

The BSP approved several relief measures for all rediscounting banks and a separate list for thrift, rural and cooperative banks.

For all rediscounting banks, the BSP is grating a 60-day grace period to settle the outstanding rediscounting obligations as of declaration date of a state of calamity (December 25, 2016) with the BSP.

It is also allowing banks to restructure with the BSP, on a case-to-case basis, the outstanding rediscounted loans of end-user borrowers affected by the typhoon.

For thrift, rural and cooperative banks, the BSP’s Monetary Board approved the following relief measures:

* Excluding outstanding loans of borrowers in affected areas from the computation of past due ratios provided these are restructured or given relief;

*Non-imposition of penalties on legal reserves deficiencies of thrift banks/rural banks/cooperative banks/non-banks with head offices and/or branches/extension offices/microfinance-oriented banks in the affected areas;

*Moratorium on monthly payments due to BSP for banks with ongoing rehabilitation programs;

*Subject to BSP approval, booking of allowance for probable losses on a staggered basis over a maximum period of five years for all types of credits extended to individuals and businesses directly affected by the calamity; and

*Non-imposition of monetary penalties for delays in the submission of supervisory reports.

Based on reports, typhoon Nina hit the Bicol area most killing six people and displaced about 380,000 families.
_______________________________________________________________________________________
Wanted: more jobs for the young
By: Cielito F. Habito - @inquirerdotnetPhilippine Daily Inquirer / 12:07 AM January 17, 2017

The past year saw good news and bad news on the jobs front in the country.

The good news was that the unemployment rate broke below 5 percent to a new record low of 4.7 percent—the lowest I have seen on record. This brought the number of jobless Filipinos down to 2.04 million from 2.37 million the year before, or a drop in the ranks of the unemployed by 332,000 workers. Even more remarkable, this drop in unemployment happened even with a higher labor force participation rate, or the percentage of those of working age (15 years or older) who actively looked for work if not already employed. All together, the labor force grew by 1.54 million workers, but was well outstripped by the 1.88 million net new jobs our economy created in the same period—a remarkable feat in light of our history of “jobless growth” over more than a decade.

So what’s the bad news? The bulk (78 percent) of the jobless are young workers between 15 and 34 years of age; half are in fact 24 years old and below. More than one in every three (34 percent) had actually gone to college, and one in five (20.5 percent) is a college graduate. In short, our country’s unemployment problem is actually a youth unemployment problem. Too many of our potentially most productive workers are out of work. This is not a good situation to be in when we have lately been priding ourselves in our relatively unique position of having a dominantly young population, now and especially in the next 30 years when much of the world would face the problem of aging.

If it’s any consolation, we are not alone in this problem of youth unemployment. The International Labor Organization, in its latest World Employment and Social Outlook (2016), observes that global youth unemployment is on the rise, after a number of years of improvement. ILO projects the number of unemployed youth globally to reach 71 million in 2016 and remain at this level in 2017. The deterioration is particularly marked in emerging economies, where youth unemployment is projected to worsen from 13.3 percent in 2015 to 13.7 percent in 2017. In Southeast Asia and the Pacific, ILO projects the youth unemployment rate to rise steadily over the coming years, from 12.4 percent in 2015 up to 13.6 percent in 2017. This means that more than half a million youth will have joined the pool of unemployed in the region by 2017.

These trends, if not arrested, will push young people to migrate, looking abroad for better education and job opportunities. ILO cites data showing that in 2015, almost 51 million international migrants were aged between 15 and 29, more than half of whom moved to developed economies. In that year, 20 percent of the global youth population in that age range expressed willingness to move to another country permanently. The problem facing them is that favored developed-country destinations are lately becoming inhospitable to migrants, the latest example being the United States, where the new president won on a perceived anti-immigration policy position.

But there is hope. The solution now appears to lie increasingly in the youth themselves, as we see more and more young people taking the lead in creating the needed jobs for their age cohort. Many of them are creating new and innovative enterprises in economies being fast transformed by new technology, including in traditional industries such as agriculture and transport. They pursue creative and innovative products and services, along with new business models made possible by the age of information and communication technology. All these could be facilitated by a supportive business environment enabled by improved infrastructure and enlightened policies.

With this in mind, the Philippines is pushing youth entrepreneurship and innovation among the key economic themes as host and chair of the Association of Southeast Asian Nations this year. Asean, after all, is a region where unemployment is particularly a problem of the young. And the Philippines, notwithstanding recent strides in reducing joblessness, must make sure its dominantly young population is productively employed well into our future.
_______________________________________________________________________________________
More branches needed — BSP
posted January 13, 2017 at 09:25 pm
by Julito G. Rada

BANGKO Sentral ng Pilipinas urged banks and other financial institutions to put up more branches nationwide so that financial services will be felt by the large number of unbanked Filipino households.

The result of the 2014 Consumer Finance Survey released by Bangko Sentral on Friday showed 86 percent of Filipino households did not have a deposit account, while only 14 percent saved their money in banks.

The foremost reason cited by the respondents for not opening a deposit account was not having enough money to keep an account. They also cited the far location of a bank, high service charges, a high minimum balance and lack of trust on banks.

“Bank branching must be encouraged so that their services will be felt by the majority of population,” Bangko Sentral Deputy Governor Diwa Guinigundo said in a briefing.

“Banking services must be more accessible to everyone, a very important thing, for us to have a more inclusive economic growth. We need to strengthen efforts toward greater financial inclusion. We have already started this and we need to sustain this,” Guinigundo said.

Monetary Board member Felipe Medalla said aside from bank branching, banks must also be allowed to have cash agents, and people must “trust these cash agents.”

The survey also showed that majority of household heads employed in private establishments and government were banked. In contrast, majority of household heads who are self-employed, worked for private household, other household’s farm, and in other informal occupations are unbanked.

Banks were the most popular type of depository institution. These included commercial banks (50.2 percent), rural/cooperative banks (13.8 percent), savings/thrift banks (10.1 percent), and microfinance banks (9 percent).

The banking system held 83.1 percent of deposit accounts of households. Other depository institutions of households were multi-purpose/credit cooperative (11.4 percent), paluwagan (4.1 percent), and savings and loan association (3.6 percent).
_______________________________________________________________________________________
BSP shutters Batangas rural bank
By: Ben O. de Vera - @inquirerdotnet
Philippine Daily Inquirer / 04:29 PM January 13, 2017

The Bangko Sentral ng Pilipinas (BSP) has shuttered a rural bank in Batangas due to insolvency, the first in 2017.

The Monetary Board—the BSP’s highest policymaking body—in a Jan. 12 resolution prohibited Countryside Cooperative Rural Bank of Batangas from doing business, state-run Philippine Deposit Insurance Corp. (PDIC) said in a statement Friday.

As designated receiver, the PDIC on Friday took over the five-unit rural bank as well as its affairs, assets, branches and records. Its head office was located in Batangas City, while its four branches were in Balayan, Lemery, Padre Garcia and Tanauan, also in Batangas province.

According to the PDIC, Countryside Cooperative Rural Bank of Batangas’ bank information sheet showed that as of June 30 last year, it was owned by the following: Soro-soro Ibaba Development Cooperative (26.64 percent), Binubusan Multi Purpose Cooperative (7.95 percent), Smammci (4.91 percent), as well as other stockholders with no over 5-percent ownership.

Its chief executive was Marisa T. Villoso, while it was chaired by Josie G. Manalo.

The rural bank’s latest records also showed that as of Sept. 30 last year, it had 10,552 accounts with total deposit liabilities of P193.3 million, of which 86.8 percent or P167.7 million were insured deposits.

“PDIC assures depositors that all valid deposits and claims shall be paid up to the maximum deposit insurance coverage of P500,000. Depositors with valid deposit accounts with balances of P100,000 and below shall be eligible for early payment and need not file deposit insurance claims, except accounts maintained by business entities, or when they have outstanding obligations with Countryside Cooperative Rural Bank of Batangas or acted as co-makers of these obligations,” the PDIC said.

Last year, the BSP closed down a total of 22 lenders, of which 21 were rural banks. RAM/rga
_______________________________________________________________________________________
Duterte orders arrest of ‘Bumbay’ moneylenders
By: Gil C. Cabacungan, Leila B. Salaverria - @inquirerdotnetPhilippine Daily Inquirer / 02:33 AM January 11, 2017

“Bumbay” loan sharks, you are next.

President Duterte has ordered the arrest of those motorcycle-riding moneylenders prowling Metro Manila’s slums and marketplaces to squeeze their victims—store owners so desperate for cash they are willing to borrow a fistful of pesos and pay for it in full plus an arm and a leg.

Filipinos derisively refer to the loan sharks as “Bumbay,” after the old name of Mumbai, capital of Maharashtra state on the Indian west coast.

But use of the term goes back many decades, to the time when Indians in the Philippines traded domestic stuff, such as mosquito nets, blankets and umbrellas, which they sold to Filipinos on long-term plans that cost suckers a fortune.

Justice Secretary Vitaliano Aguirre II told reporters on Tuesday the loan sharks were operating here without permit from the government and that Mr. Duterte had ordered their arrest to put an end to their usurious practices.

“The President ordered the arrest of Bumbay because he pities the [poor Filipinos] who are being sold overpriced appliances [in money-lending schemes]. They could be arrested without any warrant because when they are doing that they are committing a crime,” Aguirre said.

Unconscionable rates
Aguirre explained that although the antiusury law limiting interest rates has been repealed, the Supreme Court has ruled that moneylenders cannot impose unconscionable interest rates.

The Indians charge 20-percent interest per month on loans they give to poor market vendors and sari-sari store owners.

“It’s not illegal [to charge high rates], but that’s unconscionable and we cannot accept that kind of interest anymore,” Aguirre said.

Agriculture Secretary Manny Piñol said Mr. Duterte gave the order to arrest the loan sharks during the Cabinet meeting on Monday.

In a post on Facebook, Piñol said Mr. Duterte instructed Foreign Secretary Perfecto Yasay to inform the Indian Embassy in Manila about the government’s plan to put an end to its citizens’ usurious lending scheme here.

He said about 50,000 men from India’s Punjab state were involved in loan sharking in the Philippines, charging interest of P1,000 on P5,000 loans that must be paid in one month.

“They are violating Philippine laws by indulging in a money-making business without the necessary permits,” Piñol quoted Mr. Duterte as saying.

_______________________________________________________________________________________
Reiteration of prior years’ ‘New Year’s Resolutions’
Nelson DinioNelson Dinio
04 Jan 2017

In our work as external auditors of various companies, we need to obtain or update our understanding of our clients’ businesses, assess their internal controls and processes, review their significant transactions and check for critical changes made during the period under audit, etc. During the process, we may note certain deficiencies in internal controls or processes of their companies and then we recommend ways to correct these deficiencies. These recommendations are discussed and agreed with management and the board of directors, and are formalized through our issuance of a management letter. The adoption and implementation of such recommendations, though, rest with the companies’ management.

However, there are instances when the deficiencies noted in the previous year remain uncorrected in the current year. This happens when the recommendations made and agreed during the previous year were not properly implemented or simply not implemented at all. In this scenario, we reiterate with the management the recommendation previously made until the deficiencies are corrected.

Does the scenario above seem familiar? In our lives, once another year comes to a close, we tend to look back and see what happened, and make a list of promises of things to do (or will not do anymore); yes, this is most commonly known as our “New Year’s Resolutions.” We routinely make these resolutions every year and then eventually notice: Aren’t these the same things that I promised to do last year and the year before that?

As we welcome 2017, my staff, Kaith and Kers, and I decided to conduct a survey of the top five New Year’s Resolutions that we, in the company, failed to keep. We interviewed 50 individuals, randomly selected, with ages ranging from 18 to 60, about their most commonly broken New Year’s Resolutions. The results of the survey are listed below:

#5 – “Be more diligent and stop procrastinating”
Doesn’t it feel great when you start the year right by having so much energy to do everything you need and want to do? Unfortunately for some, this can be a very hard task to make. Sure, some people have the “new-year-new-me” spirit during the first few weeks of the year as they try to do their best to achieve in a timely manner whatever goals they have set, but once a distraction appears, they get back to embracing the “mañana” habit and start singing Annie’s song again: “Tomorrow, tomorrow, I love you tomorrow.”

#4 – “Be on Time”
How many times have we used the terrible and obvious traffic in the city as the main reason for being late for work, meetings and even simple get-togethers? By now, the bosses have heard all the excuses for being late so subordinates should have worked out their solutions. People are fully aware of the consequences of coming to work late, but some just cannot resist the imaginary magnetic force pulling them back into bed for “just five minutes more.”

#3 – “Adopt a healthy lifestyle”
This does not pertain solely to control over the food we eat, but also to other unhealthy activities like drinking too much soft drinks and alcohol, smoking, and avoiding physically rigorous activities, such as hitting the gym for regular exercise. Though this landed on the third spot, I think this is one of the most commonly broken resolutions, as this requires a lot of willpower. After all, why bother going to the gym when you can just be a couch potato in front of your favorite movie series while bingeing on popcorn ice-cold sugar water, and without that small voice behind you chastising you as though you’ve committed a crime.

#2 – “Save money”
This is a very common resolution just after the holidays, since it is the time when people have grasped the extent of their spending on gifts and other luxuries for Christmas. Also, saving money is not an easy task for most people, especially to those whose careers are just starting to bloom and breadwinners who have families depending on them. Some people, meanwhile, cannot meet this objective because of the desire to reward themselves with material things from time to time for a job well done, to console themselves after a stressful day at work, or for whichever reason that would make buying that glamorous bag or eating at that fancy restaurant seem reasonable. We all have different ways of coping with stress—most of which involve spending, sadly.

And #1 – “Lose that weight/go on a diet”
It wasn’t a surprise at all that losing weight (with 85 percent of the respondents) lies at the top of our list of broken promises. This seems to be a product of guilt after consuming all those greasy and high-calorie foods during the holidays. Most of the people are having difficulty making this into a reality because eating is such a delightful hobby and again, a common way of dealing with stress.

Cliché as it may seem, the old saying rings very true in this case: these resolutions are “easier said than done,” as they require focus, discipline and a lot of willpower to fulfill. Making a list of the things you think you can improve on is a good practice, but there’s no need to wait for another year to pass to start doing them. If you already have the proper resources, delaying these resolutions would do you no good. As they say, “today is always the best day.”

Nelson J. Dinio is the head of Business Development Group and Japan Desk of P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory, and Outsourcing firms in the Philippines, with 21 partners and over 800 staff members. For comments, please email nelson.dinio@ph.gt.com or PAGrantThornton.marketscomm@ph.gt.com. For our services, visit our website, www.grantthornton.com.ph.
_______________________________________________________________________________________
Landbank to triple farm lending
By: Ben O. de Vera - @inquirerdotnet
Philippine Daily Inquirer / 03:01 AM December 26, 2016

Land Bank of the Philippines plans to triple to P115 billion its lending to small farmers and fisherfolk by 2022 by tapping what the state-run lender called “corporatives.”

The Department of Finance announced that Landbank’s target to drastically ramp up its loan portfolio for the agriculture sector from P37.9 billion at present was in line with “President Duterte’s goal of dispersing the benefits of growth to the countryside through the development of the farm sector.”

According to Landbank president Alex Buenaventura, he would initiate a reengineering of the credit facilities for small stakeholders in the agriculture sector and encourage them to enter into “corporatives.”


“A corporation would be formed to manage the consolidated farms of small farmers who wish to take part in the corporative. The corporation would be owned 40 percent by Landbank and 60 percent by participating commercial banks. The farmers would provide the manpower to keep their lands profitable,” Buenaventura explained.
Also, 99 percent of the corporation’s earnings would be distributed to the participating farmers pro-rata according to their respective land ownership, while 1 percent would be declared as dividends of the corporate owners, Buenaventura added.

The Landbank chief also said that he would discuss with regulators the plan to allow commercial banks that would be part of the corporative to strictly comply with the Agri-Agra Law and allocate 15 percent of their total loanable funds to farmers and fisherfolk as well as 10 percent to agrarian reform beneficiaries, instead of paying fines for noncompliance.

“Also, a portion of the profits earned every harvest by the farmers would be used by them to buy equity in the corporation, until such time that the 60 percent owned by commercial banks is fully divested to the small farmers,” according to Buenaventura.

The proposed corporative approach aims to make small Filipino farmers globally competitive and among the most productive and profitable in Asia, Buenaventura said.

Landbank data showed that as of September, only 8.2 percent of the loan portfolio or P37.9 billion of the total P482 billion were infused into the agriculture sector.

With an end-September net income of P10.3 billion—an improvement from P4.1 billion a decade ago—Buenaventura said the lender was in a very good position to further expand its services, reach and support especially to its mandated sector, the farmers and fishers.

Buenaventura said that under the corporative, farmers could plant any of the following cash crops that have high export potentials: Abaca, banana, cacao, coconut, palm oil and rubber.

“Under the setup, the Department of Agrarian Reform will identify the lands owned by small farmers that can be formed into corporatives cultivating rice, sugar and banana,” said Buenaventura. “The scheme will also work for palay farmers who could face new challenges next year with the possible lifting of the quantitative restrictions on rice in 2017.”

State planning agency National Economic and Development Authority earlier disclosed the decision of the majority of economic managers to remove the Philippines’ quota on rice importation as the government moves to lower the prices of the Filipino staple food.

Economic managers have been pushing the amendment of the decade-old Republic Act No. 8178 or the Agricultural Tariffication Act of 1996, which had put the rice import quota in place. In 2014, the World Trade Organization (WTO) allowed the Philippines to extend its QR on rice until June 30, 2017, in a bid to buy more time for local farmers to prepare for free trade in light of the government’s goal of achieving rice self-sufficiency.

Since the government imposes a quota on rice imports, domestic prices are vulnerable to shocks resulting from meager supply. The QR puts the burden of rice supply and demand on the government as market forces are being limited by the quota system.
_______________________________________________________________________________________
LandBank to set up OFW Bank by September 2017
By Rea Cu -DECEMBER 20, 2016

THE Land Bank of the Philippines (LandBank) will set up a bank co-owned by overseas Filipino workers (OFWs) by September 2017, with an authorized capital of P3 billion, to be able to actively cater to the banking needs of Filipinos working abroad.

Finance Secretary Carlos G. Dominguez III said that, while the requirements and procedures to establish the OFW Bank are still being completed, LandBank will set up a representative office in Saudi Arabia to cater to the banking needs of 800,000 Filipino workers based in that country.

The finance chief said the OFW Bank will be established through LandBank’s acquisition of the Philippine Postal Savings Bank Inc. (Postal Bank), which will be converted into a LandBank subsidiary that will be owned 30 percent by OFWs.

“The acquisition of the Postal Bank will be completed by the third quarter of 2017, after all required procedures are completed and approvals are secured. The LandBank has sufficient resources to complete this transaction,” Dominguez said.

As of September 30 this year, the LandBank ranked as the country’s fourth-largest commercial bank, with a total capital of P90.9 billion and assets amounting to P1.3 trillion.

LandBank President Alex V. Buenaventura said it will take eight months to accomplish the requirements that would convert the Postal Bank into a LandBank subsidiary.

“The OFW Bank will be a listed company with an authorized capital of P3 billion and a subscribed capital of P2 billion, of which P1 billion is paid up by LandBank. Another P1 billion will be open for subscription to OFWs who can acquire them by buying shares in the bank,” Buenaventura said.

LandBank will have to seek clearances from the Governance Commission for Government-owned and -controlled Corporations and the Philippine Competition Commission, as well as approvals from the Monetary Board, Securities and Exchange Commission and the Bangko Sentral ng Pilipinas (BSP) for the OFW Bank to be operational by September 1, 2017.

“We are going to do focus-group discussions with representatives of our target markets to determine where and what services are needed, and what name and logo to adopt for the bank,” Buenaventura said.

The finance chief said LandBank “will seek to establish a unit in Saudi Arabia to assist the OFWs there” while the OFW bank has yet to be established.

Buenaventura said LandBank decided to open the Saudi unit in Riyadh, because 40 percent of OFWs based in that country reside there.

“The LandBank unit will be opened near the Philippine labor office or near a place where OFWs usually converge and meet,” he said.

Buenaventura also said starting January 2, 2017, LandBank, with the involvement of the Commission on Audit and the BSP, will begin undertaking due diligence to start the process of converting the Postal Bank into a LandBank subsidiary.

In earlier reports, Dominguez said the transaction involving the buyout of the Postal Bank may take 11 months to finish. The thrift bank has total assets amounting to P12.07 billion as of March this year.

President Duterte has approved the proposal by Labor Secretary Silvestre H. Bello III establishing the Postal Bank becoming the “Workers’ Bank” during a Cabinet meeting on December 5.
_______________________________________________________________________________________
Are Filipinos bad savers?
By: Cielito F. Habito - @inquirerdotnetPhilippine Daily Inquirer / 12:48 AM December 20, 2016

Filipinos, it would seem, are the worst savers in Southeast Asia. The numbers show it. Measured as the ratio of gross domestic savings to gross domestic product (the latter being a measure of national income), our saving rate is quite strikingly the lowest among our Asean neighbors. Based on data from the Asian Development Bank, our 15.2-percent domestic saving ratio in 2015 was far lower than Singapore’s 53.2, Thailand’s 35.4, Indonesia’s 33.2, Malaysia’s 32.7, Myanmar’s 31.8, Vietnam’s 25.7, Brunei’s 19.9, and even Cambodia’s 17.3 percent (no data were given for Laos). Judging from these numbers, average income doesn’t appear to explain our low savings, as often cited to be the reason. Are Filipinos really spendthrifts compared to other Southeast Asians?

Looking around, one is tempted to believe so. After all, we have some of the biggest shopping malls around the world. Most Filipino tourists’ idea of tourism abroad seems to be visiting the malls and factory outlets. The average Filipino wage worker seems to spend his/her income even before earning it. We can see it in the “vale” system, where a worker asks for an advance on his/her wage well before payday—a practice that is quite common in the Filipino workplace. Employees commonly borrow from informal lenders off incomes they have yet to earn. Ever have to wait in line at an automatic teller machine behind someone making several transactions with a bunch of ATM cards? Chances are, that person is a so-called “5-6” informal lender withdrawing payments from debtors, who willingly surrender their cards to their friendly neighborhood loan shark as security for regular loans.

Why do Filipinos save so little, compared to their Southeast Asian neighbors? A tempting answer would be that most Filipinos are too poor to save. But from the cited Asean comparisons, lower average incomes can’t be the primary explanation. A friend claims that Filipinos who do save (that is, those with higher incomes) have saving rates even exceeding that of Singaporeans. But given wider income disparity in our society, with the wide majority of Filipino households earning barely enough to support their basic needs, overall savings come out lower. Wider poverty and inequity could be the culprit, then.

But other friends disagree. We may not see it readily, but the poor do save, say those who have actually studied and worked with the poor where they are, and they claim that there remains great potential there for saving. They point to the billions of pesos that flow through the ubiquitous jueteng, the supposedly illegal numbers game that remains widespread nonetheless, primarily patronized by low-income groups. While that’s gambling, not saving, it still suggests that there is great wealth in the poor, and much potential saving out there.

Researchers have documented how poor families especially in rural areas stock up on certain commodities—not necessarily durables like jewelry or appliances, but even just storable groceries—and then sell these off in times of need for cash. That is saving. I’ve witnessed many a rural household keep a pig tied up in the backyard, fattening it mostly with kitchen refuse collected from neighbors, and an occasional kilo or two of rice bran. The pig is sold or slaughtered in time of need, such as in time for the kids’ school expenses. That is saving. And then there are the “paluwagan” schemes one seems to find in every poor neighborhood, especially among the women. Again, that is saving.

Who says the poor don’t save? They do, except that they save in forms that never find their way into the formal financial system or the official economic statistics. Chances are, our low officially reported saving rate is substantially understated, given these various unrecorded forms of saving actually undertaken by the poor. What more if we can channel the daily amount many of them stake in jueteng into productive savings schemes instead? The challenge, then, is how to capture the substantial savings coming from lower income groups into the financial pool, and mobilize these for economic growth and development.
_______________________________________________________________________________________
‘Beware of scammers, swindlers,’ Negros Occidental banks told
Wednesday, December 14, 2016
By ERWIN P. NICAVERA

THE Bangko Sentral ng Pilipinas (BSP) has warned anew supervised financial institutions in Negros Occidental, particularly rural banks, to be extra cautious against scammers and swindlers especially during this holiday season. BSP-Bacolod Branch Deputy Director Job Nepomuceno told Sun.Star Bacolod they have already issued an advisory to prevent local financial institutions and other potential targets from being victims of scams.

Nepomuceno said these scams are perpetrated through communication, certification, or other kinds of false representation that are made to appear as officially issued by BSP or any of its officials. “Their modus includes impersonating Deputy Governor Nestor Espenilla Jr. or any of our officials in soliciting donations and contributions for specific events,” he said, adding that these scammers strike anytime especially during December when money circulation is strong. It is not the practice of BSP, and none of its officials are allowed to solicit donations, monetary or otherwise, Nepomuceno stressed.

Since the issuance of the advisory this month, BSP-Bacolod Branch has not yet received any report of such incident in the province. BSP, however, said the public should not be complacent because “they (scammers) might also have their timing.” In victimizing financial institutions, scammers or swindlers may copy or imitate the BSP seal. Fake documents also include forged and digitally copied signatures of officials, Nepomuceno said. He added that banks are advised to ask for assistance from BSP-Bacolod Branch if they are not sure of the authenticity of the documents alleged to be from the BSP.

“We have to be proactive. We should be alert all the time, not only during Christmas,” Nepomuceno said. Moreover, aside from solicitation through emails and written letters, the public may also be victims of scams through text. Nepomuceno said that last week, one of their staff received a text message that she won a cash prize through the BSP’s supposed promo. “We don’t have programs like raffle or any contest that is being announced through text message thus, the public are warned to ignore this,” he added.
_______________________________________________________________________________________
Demise of Filipino life insurance sector
posted December 13, 2016 at 12:01 am by Rudy Romero

Policymaking can be a very tricky activity even under the best of circumstances. There are several reasons for this. Undoubtedly the most important of these is the fact that in the pursuit of one policy desideratum, another is often downgraded or cast aside. A prime example of this is a situation that is unfolding before our eyes.

The situation I speak of relates to the Philippine life insurance industry. I use the word ‘Philippine’ because it is to the industry’s Filipino-owned segment that I am referring. That segment is slowly being wiped out, thanks to government policy.

The incipient demise of the Filipino-owned life insurance companies is the side effect of well-intentioned government policy toward the life insurance business in this country. In this instance a good intention has—as the oft-quoted saying goes—paved the road to hell.

The policymakers’ good intention was their desire to strengthen the domestic life insurance companies to a point where they would be able to meet the more intense foreign competition that was bound to result from Philippine membership of WTO (World Trade Organization) and the coming into existence of the Asean Economic Community.

The regulator of the Philippine insurance industry—the Insurance Commission (IC), a part of the Department of Finance (DoF) family of agencies—appreciated that there could be no strengthening of the Philippine insurance industry without a firming up of the equity structures of the Filipino life insurance companies. Accordingly, it issued a circular requiring all those companies to raise their paid-in capital to a certain minimum amount. The capital buildup was to be completed by a certain date, failing which the Filipino life insurance companies would lose their operating licenses.

In essence, DoF and IC acted in a comprehensible manner in requiring the Filipino life insurance companies to undergo a capital buildup program. Meeting intensified foreign competition does, after all, require the infusion of additional equity into their companies by the owners. If the required additional capital infusion had been within the owners’ capabilities, there would have been no problem and the need-to-meet-foreign-competition issue would have been addressed.

Unfortunately that is not how things happened. DOF/IC set the levels for the required additional-capital infusion so high—several hundreds of million pesos in some instances—that the Filipino-owned life insurance companies began to ask themselves if the government wanted them to stay in business. In truth, hardly any of the Filipino life insurance companies has been in a position to produce the additional equity required by DoF/IC. And even if by one means or another—including borrowing—they were capable of raising the required additional capital, the Filipino life insurance companies have been wondering whether it would be worthwhile for them to comply with a new requirement of a government that they consider insensitive and uncaring.

Being unable—or, in one or two cases, unwilling—to comply with the government’s capital buildup program, a succession of Filipino life insurance companies has chosen to get out of an industry that they love and that has been remunerative for them. Their ranks are gradually being depleted by receiverships and liquidations.

A case in point is Philippine Prudential Life Insurance Co., a company founded around 50 years ago by Daniel L. Mercado, a US-trained actuary. Being unable to raise the required additional-capital infusion, the company is now in receivership. It is so sad that in the twilight of his years Mr. Mercado should contemplate the progressive demise—due to a government policy change—of a company that he brought to life and had nurtured all these years.

Back to the point I made at the outset about the tricky character of government policymaking. Must a well-intentioned change in government policy toward an industry give rise to negative effects down the line in the same industry? In the case of the Filipino-owned life insurance companies, might the desired strengthening of the Philippine insurance industry have been accomplished without killing off life insurance companies that were founded with Filipino capital, were nurtured by Filipino professionals and have not been a burden on this country’s taxpayers?

My answer is an emphatic Yes.
_______________________________________________________________________________________
Alternative to ‘5-6’ lending
By: Raul J. Palabrica - @inquirerdotnetPhilippine Daily Inquirer / 02:18 AM December 12, 2016

Mention the numbers “5-6” to the man on the street and the first thing that usually comes to mind is Indian nationals (or Bombays, as they are fondly called) going around the public markets or depressed areas offering to lend money to people who need it fast. The terms of the loan are simple. It can be in cash or as payment for a product that the borrower wants to purchase. No collateral is needed to secure its payment. As proof of the loan, the borrower simply signs opposite his name on a small notebook that shows the amount borrowed or product bought.

A background check on the borrower’s creditworthiness is seldom conducted. Often, it’s enough that he has a permanent address, not a transient of the place. The transaction can be completed in minutes and no other documents are signed or exchanged. If the credit extended is, say, P5,000, the borrower has to pay P6,000 after a month. The lender will come at the appointed date to collect the payment. Once the debt is fully paid, the borrower’s entry in the notebook is crossed out and he becomes eligible for another loan.

Trade Secretary Ramon Lopez wants to put an end to this kind of transaction because it translates to an interest rate of 20 percent a month, which is way above commercial lending rates.

To meet this objective, Lopez said the government would set aside P1 billion next year to lend money to micro and small enterprises at 2-percent-a-month interest, with P2,000 as the minimum loan. According to reports, 98 percent of registered businesses in the country are micro, small and medium enterprises and they employ more that 50 percent of the national workforce.

This is not the first time that the government has made plans to reduce, if not eliminate, the lending scheme that is identified with Indian nationals. But the trade continues, and has even expanded, in spite of the increase in the number of financing and credit firms. It’s doubtful if the proposed cut in the interest rate to 2 percent a month will wean away micro and small businessmen from the 5-6 lending scheme.

The principal reason for the popularity or acceptability of this transaction is convenience. The borrowers do not have to look for the lenders. The latter go to the public markets or places where they think there are people who need quick cash and have the capacity to pay the loan. On the other hand, if a prospective borrower wants to apply for a loan with a financing company or a bank, he has to dress up (or at least look presentable) and visit its office, which is not only inconvenient but can sometimes be intimidating.

Also working in favor of this grassroot-style lending is the absence of the paperwork that usually accompanies borrowing from formal lending sources. There is no need to present copies of income tax returns or other proof of ability to repay the loan. It’s all a matter of faith. The lender assumes that the borrower will not renege on his promise to pay the loan when it falls due. If the borrower absconds, that’s considered part of the risks of doing business.

For the lender, the 20 percent interest a month is sufficient compensation for the possibility of failing to collect some loans or, worse, getting mugged while in the process of during his rounds. On the part of the borrower, the exorbitant interest rate is considered a bitter pill that they have to swallow to be able to fund their small business or enjoy the small pleasures of life.

The key to putting an end to the 5-6 lending scheme is matching the lenders’ advantage in convenience or easy accessibility. The planned lending facility should have a visible presence in public markets or in areas where micro and small enterprises ply their trade so they need not go far if they want to secure additional funding for their business.

The documentation of the loans can be ticklish. Because public funds will be lent out, the transactions will have to comply with existing banking and audit regulations. The loans should be processed as fast as possible and with the minimum of paperwork without sacrificing the need to ensure that they are paid. Collection can be a problem too. Because public money will be lent out, the borrowers may treat them as dole-outs to which they are entitled and therefore need not be paid.

The proposed alternative to 5-6 lending scheme should be carefully studied before its implementation to avoid precious taxpayers’ money going down the drain or winding up in the pockets of unscrupulous politicians.
_______________________________________________________________________________________
BSP lifts another bank restriction
Posted on December 12, 2016

SMALL BANKS can now resume setting up branches in key Metro Manila cities previously closed off to new entrants, as part of Bangko Sentral ng Pilipinas (BSP) moves to reopen the financial system even further to more players.

BSP’s Monetary Board has allowed rural and cooperative lenders to open new branches all over the Philippines, including Metro Manila cities earlier deemed “restricted” areas due to high density: Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig, Quezon City and San Juan.

However, such banks will have to meet higher capital requirements and will be subject to special licensing fees if they are to open branches in these cities, in keeping with sound risk management protocols.

Prior to this reform, only microfinance-oriented lenders were allowed to set up shop in the capital, in order to extend credit to micro and small enterprises.

“Consistent with the BSP’s policy of promoting a competitive banking environment and ease of doing business, the Monetary Board approved the amendments to the guidelines on the establishment of branches to provide banks with more flexibility in expanding their branching network to strategic locations,” the central bank said in a statement sent over the weekend.

“The move is aligned with the initiatives on banking system liberalization which include the removal of the branch moratorium in restricted areas and the gradual lifting of the suspension on the establishment of new domestic banks.”

OPENING UP
All banks operating in the Philippines must seek Monetary Board approval before opening a new branch anywhere in the country, and must comply with regulatory standards.

The central bank lifted in 2011 a branching ban on universal and commercial banks putting up new offices within Metro Manila, as part of a “phased-in” approach in liberalizing the local banking sector.

However, it kept the restriction on rural and cooperative lenders.

The BSP announced in February that it would gradually lift a 1999 moratorium that halted the entry of new domestic banks, except in unbanked areas and for microfinance.

This reform was to be undertaken in two steps: first, thrift banks will be allowed to apply for licenses to upgrade to universal or commercial bank status until mid-2017.

By Jan. 1, 2018, the ban on new licenses will be lifted for all entities.

NO CHOICE
The simpler rules are seen to allow banks to position themselves better as external players come in, following the signing of Republic Act No. 10641 that in July 2014 allowed the full entry of foreign banks and the formal advent at the end of December last year of Southeast Asia’s economic community.

Currently, a rural lender needs a combined capital of at least P1.5 billion to open a branch in Metro Manila.

Such a bank should also be free of “major supervisory concerns” and must comply with other risk management guidelines set by the BSP, according to the manual of regulations for banks.

The local banking sector continued to expand last semester with a total branch network of 10,318.

Of the total, 484 rural banks operated 2,042 branches while 29 cooperative lenders ran 124 offices, according to latest available BSP data. -- Melissa Luz T. Lopez
_______________________________________________________________________________________
Regulators and bank scams: A game of cat and mouse
By Bianca Cuaresma -DECEMBER 5, 2016

Part One

SENATORS stung by the $81-million Bangladesh Bank cyber heist that dragged Philippine banks and casinos into the fray are close to wrapping up plenary deliberations to fast-track passage of a law plugging loopholes in the Anti-Money Laundering Act (Amla) to shield the banking system from potential sanctions by the Financial Action Task Force (FATF).

The Paris-based FATF is set to review in June next year the Philippines’s compliance with international safeguards against money launderers.

Sen. Francis G. Escudero confirmed that Congress is committed to frontload early approval of the remedial legislation that would finally include casinos in the list of covered institutions to make the Philippines compliant with the prescribed regulatory framework, in time for the upcoming assessment by the FATF.



The international watchdog earlier raised concern on the exclusion of casinos from the coverage of the existing law.

The subject has been a contentious issue. But it appears the inclusion of casinos in the law received an unintended boost earlier this year when the $81-million cyber loot stolen by hackers from a Bank of Bangladesh account in the New York Federal Reserve ended up in bogus bank accounts in Manila and were ultimately laundered in Philippine casinos and a local remittance center.

Expanding coverage


ESCUDERO acknowledged that another key consideration for ensuring the country does not run afoul of global regulators is the possible impact on millions of overseas Filipinos. He said these Filipinos may face difficulty transacting, especially when they remit earnings to their families back home. Filipinos abroad remitted over $25 billion last year, government data show. Bangko Sentral ng Pilipinas (BSP) data also showed that about $0.254 million was remitted from Bangladesh last year.

The Senate Committee on Banks and Financial Institutions, chaired by Escudero, has completed public hearings on proposed amendments to the Amla. The committee expanded the coverage of Republic Act 9160 to include remittance centers, as well as dealers of precious stones, jewels and metals and other high-value items or goods. The coverage would also include real-estate developers, brokers and sales agents.

Escudero indicated Congress is sure to approve inclusion of casinos among covered institutions required to report to the Anti-Money Laundering Council, under pain of sanctions for noncompliance.

In addition, the proposed Amla amendments he will ask Congress to adopt when he submits the Banks Committee report to the plenary on December 5 is the upward adjustment of the cash threshold for any covered transactions at “anything in excess of P500,000, or $10,000, or other equivalent monetary instrument.”

High value

ESCUDERO said the Banks Committee is, in effect, moving for the inclusion of “dealers or those entities, like lawyers and accountants, acting in behalf of clients whenever they receive cash for profit or gains, exceeding P500,000.” In an interview, the senators suggested that “if they don’t want to be covered by the antimoney-laundering law, then they should transact or act in behalf of their clients with checks, not cash.”

But he quickly clarified that “checks are already covered by the reportorial requirements of banks under Amla.”

Considered high-value items under the measure are the following goods or items, which value exceeds P1 million: motor vehicles, including land, air and water vehicles; art and antiques; and other luxury items, such as jewelry, watches and bags.

Escudero explains that in tightening the net, the committee opted to use “generic and catch all terms.”

He said this was intended to correct “ambiguous and evasive” terms used in the existing law.

“In the original act, it simply states jewelry, with 50 percent of its value coming from the precious stone used. But this is ambiguous and evasive,” Escudero said. “What if you are paying for the luxury brand itself and not the stones? Then that’s already left out.”

The senator disclosed there were also “strong calls to include luxury car dealers, but those who deal choppers and planes and yachts will also be left out, so we phrased the inclusion as high-value goods to cover all.”

Confidence

ESCUDERO assured that the committee also moved to endorse another key provision empowering the antimoney-laundering regulators to “investigate motu propio or upon the request of appropriate departments or agencies transactions deemed suspicious for possible money-laundering activities.”

He acknowledged that the AMLC is already empowered to directly file through the Office of the Solicitor General a petition before the Court of Appeals for immediate issuance of “a freeze order against any monetary instrument or property deemed laundered.”

The senator conceded, however, that the remedial legislation is not likely to be passed into law before lawmakers adjourn for the year-end Christmas recess. However, he expressed confidence the awaited bill will be enacted into law shortly after Congress resumes sessions in January.

“I am sure we will meet the June deadline [to pass the amending law],” he said adding they are targeting final passage of the remedial legislation in both chambers “in the first quarter of next year.”

Sanctions

IT was in August that regulators revealed that steps were undertaken to probe what the BSP called the “Bangladesh Bank cyber heist.”

In a statement, the Monetary Board said it “approved the imposition of supervisory enforcement action on RCBC [Rizal Commercial Banking Corp.] to pay the amount of P1 billion, in connection with the special examination conducted” by the BSP relating to the Bangladesh Bank cyber heist.

“This is the largest amount ever approved as part of its supervisory enforcement actions on a BSP supervised financial institution [BSFI],” the BSP said in a statement dated August 5. “This affirms the BSP’s strong commitment to ensure the stability of the country’s financial system through strong and effective regulation of BSFIs.”

Available records revealed that the bank heist occurred in February, wherein instructions to steal about $951 million from the central bank of Bangladesh—Bangladesh Bank—were issued via the Society for Worldwide Interbank Financial Telecommunication, or Swift, network.

Of the $101 million worth of transactions orchestrated by hackers, about $81 million was traced to the Philippines.

Part Two

EITHER at gunpoint or through a seemingly innocent e-mail, bank scammers continuously and cleverly evolve through the security maze of regulations to be able to steal the hard-earned money of consumers.

And while the means of monetary exchange and instruments evolved through time, information from the Bangko Sentral ng Pilipinas (BSP) shows any monetary medium—
whether it be traditional bank notes, plastic money or checks—is susceptible to fraudsters and scammers.

Banknote security

AS old-design banknotes were losing their security value and are getting easier to falsify, the central bank in early 2015 launched the demonetization of the old-design banknotes in exchange for new, more securely designed banknotes in an effort to maintain the integrity of Philippine tender.

Along with the new design came new tactics of cash counterfeiters. Among the relatively new schemes, according to the central bank, involve the extraction of a genuine security thread from a low denomination bank note, say from a P20 bill or a P50 bill, and transferring these security threads to fake money bearing higher denominations like P500 bills and P1,000 bills.

More secure checks



CHECKS are also not spared from fraudsters.

In 2013 the central bank warned the public against reported unscrupulous persons who pass off fake checks as supposedly issued by the BSP or the Central Bank of the Philippines—the monetary authority’s former official name.

As modus operandi, the scammers would pretend to be authorized BSP representatives and would ask for money from victims in exchange for fraudulent checks that are made to appear to be worth millions of pesos each.

Aside from issuing public-information campaigns that the central bank does not issue, secure or guarantee checks, monetary authorities also recently announced new and more secure check designs.

BSP Assistant Governor Johnny Noe Ravalo said the new check design—which will be called the Check Image Clearing System (CICS)—will be larger than size, with a length of 8 inches and a width of 3 inches.

The new check, according to Ravalo, will also contain new embedded security features to allow for security and integrity to prevent check fraud even if banks are not able to inspect the actual physical check. Some new security features will be visible to the naked eye. Some features, however, can only be seen through a scanner.

Latest scams

THE latest addition to the long list of scam techniques in the country now include the impersonation of BSP Deputy Governor for the Supervision and Examination sector Nestor Espenilla and other BSP officials.

Nearly a month ago, the BSP issued an advisory warning the public of this new scheme.

The BSP said it received reports that a scam is being perpetrated to target BSP-supervised financial institutions, particularly rural banks. The modus operandi of scammers include posing or representing themselves as Espenilla.

“The swindlers, usually through telephone calls, pose as the deputy governor who would want to talk to the bank president or would request for the latter’s contact details,” the BSP said. “They use the name of Deputy Governor Espenilla Jr. for the purpose of soliciting donations for specific events or contributions of similar nature.”

On the same week, the BSP also issued alerts also involving impersonators of Espenilla, this time targeting the depositors of closed banks, representing themselves as having the capacity to facilitate the immediate release of deposits from padlocked banks.

“The BSP warns the public, especially depositors of closed banks, against such scam. Claims for payment of deposits in closed banks should only be coordinated with the Philippine Deposit Insurance Corp. [PDIC] which is the government agency responsible for the processing of claims and release of deposit insurance to depositors of closed banks,” the BSP said.

Asean technology

AS the BSP moves to put regulations a step ahead from current scamming trends, Tetangco also cautioned in their move to adopt new technology citing the security risks that come with these technologies.

The BSP governor said as the banking industry faces the dawn of the Asean regional banking integration, local players must be vigilant with the risks that comes along with the new innovations to be introduced to the market.

“As we consider supply chains and regional integration, we must be mindful of the trend of ‘disruptive innovation’,” Tetangco said in a recent speaking engagement. “In other words: finding new ways of doing old things. Technological improvements are helping define new ways for you to ‘enter’ into and be integrated in the supply chain.”

Tetangco added that “in doing so, there is a need to be mindful that using financial technology could lead to new and unanticipated financial, business, consumer protection risks, as well as cyber-security risks.”

“This is why, even as we encourage technology solutions, we also admonish banks to do so with caution and without sacrificing financial stability and the protection of your ultimate customer, the consumer,” he added.
_______________________________________________________________________________________
BSP shuts down 21st bank for year
By Lawrence Agcaoili (The Philippine Star) | Updated December 4, 2016 - 12:00am

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has padlocked another problematic bank, bringing to 21 the number of shuttered lenders this year as part of efforts to protect the depositing public from weak players.

The BSP’s Monetary Board issued Resolution 2133.A last Dec.1 prohibiting Xavier-Tibod Bank, Inc. (A Microfinance Rural Bank) in Misamis Oriental from doing business in the Philippines and placing it under the supervision of the Philippine Deposit Insurance Corp. (PDIC)

As a result, a total of 918 accounts containing deposits worth P7.9 million as of end-September were frozen under PDIC supervision.

Of the total, insured deposits amounted to P7.7 million, accounting for 97.8 percent of the entire deposit accounts. PDIC assured depositors with valid claims up to the maximum insurance coverage of P500,000 will be paid.

It is scheduled to hold a Depositors-Borrowers’ Forum on Dec. 14.

The number of banks, mostly based on the countryside, closed down this year had already surpassed last year’s 14, BSP data showed.

Before Xavier-Tibod Bank, the central also placed under receivership the Rural Bank of Magallon (Moises Padilla, Negros Occidental) Inc.; Rural Bank of Salinas Inc., Community Rural Bank of Dingras (Ilocos Norte) Inc.; Rural Bank of Luna (Isabela) Inc.; Rural Bank of Alabat (Quezon) Inc.; Rural Bank of Cabadbaran (Agusan) Inc.; Rural Bank of Siaton (Siaton, Negros Oriental) Inc.; New Rural Bank Of Binalbagan (Negros Occidental) Inc.; and Comsavings Bank with trade name GSIS Family Bank.
_______________________________________________________________________________________
BSP shutters another rural bank in Negros Occidental; 20th this year
Posted on November 21, 2016

THE BANGKO SENTRAL ng Pilipinas (BSP) has shuttered another rural bank in Negros Occidental deemed unfit to remain in business, bringing the number of lenders closed this year to 20.
In a statement, the Philippine Deposit Insurance Corp. (PDIC) said the Monetary Board has ordered the closure of Community Rural Bank of Magallon, Inc. on Nov. 17. Last Friday, the state insurer took over the bank as receiver and assumed its assets, which will then be sold in order to pay its deposit liabilities.

As the regulator of the country’s banking system, the BSP may order the closure of problem banks if found incapable of sustaining its operations without causing losses to depositors.

The bank, which operates one branch in Moises Padilla, Negros Occidental, is led by its president Robert R. Tillaman and chairman Naoya “Dan” Sakamoto, the PDIC said in a statement. Its biggest shareholder is the Magallon Integrated Holdings Corp. with a 30.55% stake, alongside eight individuals who have investments in the rural bank.

The provincial bank held deposits totalling P28.5 million across 1,315 accounts as of end-June, PDIC said, with P24.5 million covered by deposit insurance.

All bank deposits are insured up to P500,000 per account, according to the law.

Depositors whose claims stand at P100,000 and below can avail of early payment and would not need to undergo the formal process of filing for claims, excluding corporate accounts and those with outstanding dues at the bank.

The Community Rural Bank of Magallon is the second Negros Occidental-based lender to fold this year, following the Rural bank of Binalbagan, Inc. in June.

Other lenders closed down by the BSP are the Rural Bank of Salinas, Inc. and the Rural Bank of Amadeo, Inc. in Cavite; the Community Rural Bank of Dingras, Inc. in Ilocos Norte; Sampaguita Savings Bank, Inc. in Laguna; Rural Bank of Luna, Inc. in Isabela; Rural Bank of Claveria, Inc. in Cagayan; Rural Bank of Alabat, Inc. in Quezon; Rural Bank of Cabadbaran, Inc. in Agusan; and Rural Bank of Siaton, Inc. in Negros Oriental.

Also closed earlier this year were the state-owned GSIS Family Bank; Surigao City Evergreen Rural Bank, Inc.; Rural Bank of Malinao, Inc. in Aklan; Koronadal Rural Bank, Inc. in South Cotabato; Rural Bank of Panay, Inc. in Capiz; Rural Bank of Basay, Inc. and the Rural bank of Bayawan, Inc. in Negros Oriental; the Lapu-Lapu Rural Bank, Inc. in Cebu; and the Rural Bank of Villaviciosa, Inc. in Abra.

The central bank shut down 14 banks in 2015.

The PDIC is also set to conduct a public bidding for 57 assets on Dec. 14, priced at a minimum of P39.6 million as part of its fund-raising activities.

The assets to be sold include 55 residential lots, a mixed-use residential and farming lot, and one agricultural lot, which will be auctioned in an “as-is, where-is” basis. Majority of the properties were seized assets from closed banks. -- Melissa Luz T. Lope
_______________________________________________________________________________________
LandBank president vows easy-access loans for farmers
Thursday, November 17, 2016
By ACE JUNE RELL S. PEREZ

NEW Land Bank of the Philippines President Alex Buenaventura vowed to focus on easy-access lending to farmers.

As the 9th president and CEO of LandBank, Buenaventura said in a statement that the bank aims to triple lending to small farmers and fishers from the current P37.9 billion to P115 billion by 2022.

“We will build on the gains of LandBank over the years and channel these resources to support the farmers and fishers and other marginalized sectors. I will take the lead in reinforcing the bank’s development mandate which is anchored on promoting inclusive economic growth especially in the countryside, with a stronger focus on helping farmers and fishers,” Buenaventura said in his speech during his oath taking ceremony last November 11.

He underscored that to achieve this goal, re-engineering of LandBank’s lending to farmers and fishers through cooperatives will be undertaken.

“We will look into reorganizing small farmer cooperatives to enter into ‘contract growing with farm management agreement’ with big agri-buyers/processors of high yielding long-term cash crops. These include Cavendish banana, palm oil, rubber and cacao, among others,” he said.

The strategy, he said, will enable buyers/processors to totally manage the compact farms of individual small farmers.
He added the bank will also explore other innovative ways of expanding their support to agriculture.

Last week, Buenaventura served as one of the speakers of the Philippine Development Forum at the SMX Convention Center, wherein he said promotion of large-scale expansion of big agriculture buyers and processors is needed by negotiating a fair contract growing with small farmers.

He cited inaccessibility to bank loans and contract growing agreements with agriculture buyers and processors by small farmers is the major problem of the industry.

Buenaventura brings with him 36 solid years of banking experience.

Before his appointment as LandBank president, he served as president of One Network Bank Inc., a Rural Bank of BDO, following BDO’s acquisition of One Network Bank (ONB) in December 2014.

He is also known for being a staunch advocate of inclusive banking and countryside development.

Prior to this, he served as president of ONB since 2004, leading the bank through its consolidation journey from the synergy of three rural banks – the Rural Bank of Panabo (Davao), Network Rural Bank (Davao), and Provident Rural Bank of Cotabato.
_______________________________________________________________________________________
Neda approves P270B worth of infra, agri projects
By: Leila B. Salaverria - Reporter / @LeilasINQPhilippine Daily Inquirer / 12:36 AM November 16, 2016

The National Economic and Development Authority (Neda) board has given the green light to P270-billion worth of new infrastructure and agriculture projects, and likewise approved new guidelines for the thorough screening of China-assisted projects, the government said on Tuesday.

The approval of new projects brings to nearly P500 billion the Neda board’s approved projects in the first five months of the Duterte administration, Malacañang said.

The seven newly approved projects are: the south line of the North-South Railway Project; the scaling up of the Second Cordillera Highland Agricultural Resource Management Project; the expansion of the Philippine Rural Development Project; the widening of the General Luis Road from Quezon City to Valenzuela; the New Cebu International Port; Stage 2 of the Malitubog-Maridagao Irrigation Project; and the New Nayong Pilipino at Entertainment City.

In September, the Neda board approved nine projects worth P171.14 billion.

The guidelines of Neda’s Investment Coordination Committee (ICC) for processing China-backed projects were tackled during a board meeting on Monday, according to the President’s spokesperson, Ernesto Abella.

Suppliers should be of “good standing” and the contracts must be favorable to the government, the guidelines said.

The source of financing for pre-investment studies must also be free of ties to any particular country, technology, or lender.

The President earlier agreed to designate Neda’s ICC as the focal point of the management of the Philippine’s relationship with China. The ICC would be tasked with vetting business deals with China.

This came about following reports that the Philippines signed memorandums of understanding for the conduct of feasibility studies on infrastructure projects with Chinese firms that were blacklisted by the World Bank.
_______________________________________________________________________________________
Cavite rural bank is 18th to be closed this year
By: Ben O. de Vera - @inquirerdotnetPhilippine Daily Inquirer / 12:11 AM November 15, 2016

The Bangko Sentral ng Pilipinas last week shuttered another rural bank in Cavite, bringing the number of closed countryside lenders so far this year to 18.

State-run Philippine Deposit Insurance Corp. (PDIC) said the BSP’s policy-making Monetary Board, in a Nov. 11 resolution, prohibited Rural Bank of Salinas Inc. from doing business.

As designated receiver, the PDIC took over the bank as well as its affairs, assets, branches and records. The bank’s head office is located at Marseilla Street, Barangay Muzon, Rosario, Cavite. It had two branches.

“Under Section 13 of Republic Act (RA) No. 3591 (PDIC Charter), as amended by RA 10846, a bank that has been placed under liquidation shall in no case be re-opened and permitted to resume banking business. Furthermore, Section 12 thereof expressly provides that banks closed by the Monetary Board shall no longer be rehabilitated,” the PDIC said
_______________________________________________________________________________________
Philippine Prudential Life now under conservatorship
posted November 11, 2016 at 11:45 pm by Gabrielle H. Binaday

The Insurance Commission placed troubled pre-need company Philippine Prudential Life and Insurance Co. under conservatorship and suspended its authority to sell new products.

Insurance Commissioner Emmanuel Dooc issued the advisory on Friday after PPLIC failed to comply the regulatory requirements. The pre-need company is owned by the family of president and chief executive Gregorio Mercado.

Dooc said claimants with issues with the company may file their complaint to PPLIC conservator Moises Balon.

PPLIC has been placed under receivership since 2012.

The IC decided to liquidate PPI after considering the evaluation made by an IC team, the appointed receiver and the actuary assigned to conduct technical analysis on the proposed rehabilitation plan.

Based on the IC-approved liquidation plan, the first tranche of distribution will come from all the liquid trust fund assets that are in the form of cash or easily convertible to cash, such as government bonds, money market instruments and listed shares of stock.

The second tranche comprises of the non-liquid trust fund assets of PPLIC, which will be converted into cash or sold. The residual assets will be distributed last, subject to the court’s order under the liquidation case to be filed by the IC.

Dooc said the IC, along with the IC-appointed liquidator, was implementing the approved liquidation plan and was in the process of converting the non-liquid trust fund assets into cash for distribution to plan holders.

The release of the first tranche for pension, life and education plan holders, funded by the liquid assets belonging to each trust fund, started in August 2013.

The release of the second tranche for education plan holders began in September 2015. It was funded by the proceeds from the sale of a 1,100 square-meter lot in Bonifacio Global City in December 2014.
_______________________________________________________________________________________
BBSP moves to seal gap in liquidity safeguards
Posted on October 25, 2016

THE BANGKO SENTRAL ng Pilipinas (BSP) plans to impose a 20% minimum liquidity ratio (MLR) on smaller banks and quasi-banking entities in order to ensure they have sufficient buffers against financial stress, as part of a wider thrust towards improved risk management at a time of heightened market volatility.
A draft circular currently under industry consultation seeks to require BSP-supervised entities that are not covered by the Liquidity Coverage Ratio (LCR) announced last March to have liquid capital equivalent to 20% of total liabilities at any given time.

BSP Deputy Governor Nestor A. Espenilla, Jr. said in an Oct. 7 speech before bankers that more macroprudential regulations are in the works, including those that give “specific focus on the management of intraday liquidity.”

The MLR will cover thrift, rural and cooperative banks, as well as other quasi-banking entities like investment houses that are outside the scope of liquidity standards under the international Basel 3 regime, which requires financial firms to keep a stash of high-quality liquid assets.

“BSP-supervised financial institutions (BSFIs), regardless of size, are expected to maintain a sufficient level of liquidity to meet their obligations under both normal and stressed conditions,” read the new regulations being proposed by the BSP, a copy of which was obtained by BusinessWorld.

“This entails a strategy that enables prudent fund management as well as compliance with minimum quantitative liquidity requirements...,” the document explained.

“BSFIs shall maintain a liquidity buffer proportionate to their on- and off-balance sheet liabilities,” it added.

“In this regard, a prudential minimum liquidity ratio of 20% shall apply to BSFIs absent a period of financial stress.”

The draft rules define MLR as the share of a firm’s stock of liquid assets against total liabilities.

Considered eligible liquid assets are a bank’s cash on hand, other cash items, claims from the BSP, debt securities with zero risk weight and deposits in other banks, subject to a 50% haircut (percentage by which market value is reduced to take into consideration factors like capital and other requirements).

The BSP has the option to require an additional 10% should the regulator find “particular concerns” on the liquidity exposure of a certain entity.

Banks must also monitor the share of liquid assets in terms of both the peso and foreign currency deposit units where there is “significant activity.”

All firms must also submit a monthly report on MLR compliance, according to the draft regulations.

BSFIs may use their stock of liquid assets in the event of a funding crunch or unforeseen liquidity needs, the BSP said.

The BSP should be notified if a lender were to fail to meet the 20% ratio for three banking days within a two-week rolling calendar period, complete with an explanation and a plan of action to return to the MLR level.

A shortfall in the amount of liquid assets will warrant heightened supervision from the central bank, while failure to meet the standard for a “prolonged” period would lead to remedial action and possible sanctions.

The BSP in March announced a phased-in implementation of the LCR that requires universal and commercial banks to hold easily convertible assets to cover total net cash outflows for a 30-day period.

The central bank had set an “observation period” for the new liquidity rule from July this year to end-2017, during which lenders are required to report their LCRs to the central bank.

By Jan. 1, 2018, banks’ asset coverage must account for at least 90% of total net cash outflows, eventually hitting 100% by Jan. 1, 2019.

Another macroprudential standard, the Net Stable Funding Ratio -- involving longer-term “reliable” sources of funding -- is also being finalized by the BSP and eyed to be rolled out by yearend.
_______________________________________________________________________________________
BSP shutters rural bank in Laguna
By: Ben O. de Vera / @BenArnolddeVera
Philippine Daily Inquirer / 04:29 PM October 15, 2016

The Bangko Sentral ng Pilipinas(BSP) last week shuttered a rural bank in Laguna, bringing the number of closed countryside lenders so far this year to 16.

In a bulletin, state-run Philippine Deposit Insurance Corp. (PDIC) said the Monetary Board, the BSP’s highest policymaking body, in an Oct. 13 resolution prohibited San Pedro City, Laguna-based Sampaguita Savings Bank Inc. from doing business.

With the closure of Sampaguita Savings Bank, which had a lone branch in Biñan City, Laguna the number of shuttered rural banks thus far in 2016 already exceeded the 14 last year.
_______________________________________________________________________________________
Fewer banks, more branches in H1, says BSP
By Lawrence Agcaoili (The Philippine Star) | Updated October 4, 2016 - 12:00am

MANILA, Philippines - The number of banks operating in the Philippines continued to decline in the first half amid the continued consolidation of banks, as well as the exit of weaker players particularly rural banks, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data from the central bank showed the number of big and small banks operating in the country reached 618 in end-June, 20 less than the 638 in end-June last year.

The number of big banks or universal and commercial banks went up to 41 in end-June from 36 in end-June last year with the entry of new foreign banks.

These comprised of 21 universal banks consisting of 12 private domestic banks, three government banks and six foreign bank branches as well as 20 commercial banks comprised of five private domestic banks, two foreign bank subsidiaries and 13 foreign bank branches.

President Aquino signed RA 10641 in July last year amending the foreign bank law by removing the limit of foreign banks in the country earlier set at only 10.

The BSP has so far given eight foreign banks the green light to operate in the Philippines. These include Sumitomo Mitsui of Japan, Shinhan Bank of South Korea, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Yuanta Bank of Taiwan, the United Overseas Bank Ltd. of Singapore, Seoul-based Woori Bank and First Commercial Bank of Taiwan.

The BSP said the number of thrift banks reached 64 in end-June from 69 in end-June last year, while the number of rural and cooperative banks decreased to 513 in end-June from 532 a year ago
_______________________________________________________________________________________
Fewer banks, more branches in H1, says BSP
By Lawrence Agcaoili (The Philippine Star) | Updated October 4, 2016 - 12:00am

MANILA, Philippines - The number of banks operating in the Philippines continued to decline in the first half amid the continued consolidation of banks, as well as the exit of weaker players particularly rural banks, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data from the central bank showed the number of big and small banks operating in the country reached 618 in end-June, 20 less than the 638 in end-June last year.

The number of big banks or universal and commercial banks went up to 41 in end-June from 36 in end-June last year with the entry of new foreign banks.

These comprised of 21 universal banks consisting of 12 private domestic banks, three government banks and six foreign bank branches as well as 20 commercial banks comprised of five private domestic banks, two foreign bank subsidiaries and 13 foreign bank branches.

President Aquino signed RA 10641 in July last year amending the foreign bank law by removing the limit of foreign banks in the country earlier set at only 10.

The BSP has so far given eight foreign banks the green light to operate in the Philippines. These include Sumitomo Mitsui of Japan, Shinhan Bank of South Korea, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Yuanta Bank of Taiwan, the United Overseas Bank Ltd. of Singapore, Seoul-based Woori Bank and First Commercial Bank of Taiwan.

The BSP said the number of thrift banks reached 64 in end-June from 69 in end-June last year, while the number of rural and cooperative banks decreased to 513 in end-June from 532 a year ago
_______________________________________________________________________________________
More foreign banks want to join PH financial sector
Thursday, September 01, 2016
By JEANDIE O. GALOLO

WITH the liberalization of the Philippine banking sector, the Bangko Sentral ng Pilipinas (BSP) sees more foreign banks joining the country’s financial sector soon.

BSP Deputy Governor Diwa Guinigundo said there are banks abroad that have expressed interest to do business in the Philippines, although he did not disclose these.

The central bank previously said that foreign banks account for less than 10 percent of the total banking industry’s assets.
Since Republic Act 10641, the law allowing full entry of foreign banks in the Philippines, took effect in July 2014, eight banks have begun operations in the country.

The latest to enter is the First Commercial Bank of Taiwan, the third Taiwan-based lender in the county.

The others include the Sumitomo Mitsui of Japan, Shinhan Bank of South Korea, Cathay United Bank of Taiwan, Industrial Bank of Korea, Yuanta Bank of Taiwan, and the United Overseas Bank Ltd. of Singapore.

The central bank also allowed Korea’s Woori Bank to acquire a 51-percent stake in the Gaisano family’s Wealth Development Bank through the Viscal Development Corp.

While BSP looks forward to welcoming more foreign institutions, it has also closed down an increasing number of rural banks. Rural banks that have been closed this year reached 15, which is more than last year, said Guinigundo.

The BSP official said this has to be done to protect public depositors.

“First, if we see that they are doing an unsound and unsafe banking practices, that’s one of the criteria (in closing a bank). Second, we decide if these banks will not endanger the depositors and the general public,” the central bank official said.
Data from the BSP shows that the number of banks in the first quarter of this year reached 622, down from the 646 last year. Of the 622 banks, 515 are rural and cooperative banks, lower from the 541 banks.
_______________________________________________________________________________________
More foreign banks want to join PH financial sector
Thursday, September 01, 2016
By JEANDIE O. GALOLO

WITH the liberalization of the Philippine banking sector, the Bangko Sentral ng Pilipinas (BSP) sees more foreign banks joining the country’s financial sector soon.

BSP Deputy Governor Diwa Guinigundo said there are banks abroad that have expressed interest to do business in the Philippines, although he did not disclose these.

The central bank previously said that foreign banks account for less than 10 percent of the total banking industry’s assets.
Since Republic Act 10641, the law allowing full entry of foreign banks in the Philippines, took effect in July 2014, eight banks have begun operations in the country.

The latest to enter is the First Commercial Bank of Taiwan, the third Taiwan-based lender in the county.

The others include the Sumitomo Mitsui of Japan, Shinhan Bank of South Korea, Cathay United Bank of Taiwan, Industrial Bank of Korea, Yuanta Bank of Taiwan, and the United Overseas Bank Ltd. of Singapore.

The central bank also allowed Korea’s Woori Bank to acquire a 51-percent stake in the Gaisano family’s Wealth Development Bank through the Viscal Development Corp.

While BSP looks forward to welcoming more foreign institutions, it has also closed down an increasing number of rural banks. Rural banks that have been closed this year reached 15, which is more than last year, said Guinigundo.

The BSP official said this has to be done to protect public depositors.

“First, if we see that they are doing an unsound and unsafe banking practices, that’s one of the criteria (in closing a bank). Second, we decide if these banks will not endanger the depositors and the general public,” the central bank official said.
Data from the BSP shows that the number of banks in the first quarter of this year reached 622, down from the 646 last year. Of the 622 banks, 515 are rural and cooperative banks, lower from the 541 banks.
_______________________________________________________________________________________
Making farming, agri ‘sexier’
By: Jocelyn R. Uy
@inquirerdotnet
Philippine Daily Inquirer
02:01 AM August 24th, 2016

TO MAKE farming and agriculture sexier to the youth, money could be the “sexiest attraction” of all, according to the Department of Education (DepEd).

Education Secretary Leonor Briones said she was mulling over a policy declaration that would urge companies involved in immersion programs for farming and agriculture students to give them allowances or some form of honorarium.

In a hearing of the Senate committee on education, arts and culture on Monday, senators and education officials agreed that there was a need to make agriculture courses more appealing to students following the low turnout of enrollees in the agriculture strand of the Senior High School (SHS) program.

Sen. Sherwin Gatchalian, vice chair of the committee, asked education officials how many of those in the technical-vocational-livelihood strand were in agriculture.

“It’s very low [because] it’s not sexy to young people,” answered Education Undersecretary Dina Ocampo.

Gatchalian said agriculture courses being not appealing to young people posed a big problem in the future since 60 percent of the country’s current workforce was in agriculture.

“Our country generates about 40 percent of its GDP from agriculture. If we don’t have a future workforce going into agriculture that will be a big problem in the immediate term. So maybe we can also be enlightened as to how to make it sexier for students to join the agriculture strand,” he said.

Contrary to these statistics, however, the Department of Agriculture in March reported the agriculture sector employed over 30 percent of the Philippine workforce but contributed less than 15 percent to GDP.

Agreeing that agriculture courses needed some spicing up, Briones said that if the government wanted to attract more young Filipinos to take up agriculture “we have to make it financially viable for them.”

“If we are thinking of how to make agriculture sexy, economics and finance is the sexiest attraction of all,” she told the committee chaired by Sen. Bam Aquino.

“If we are thinking of how to make agriculture sexy, economics and finance is the sexiest attraction of all,” she told the committee chaired by Sen. Bam Aquino.

Data presented by DepEd showed that out of the 1.517 million students enrolled in the SHS program, 60.27 percent or over 914,000 students signed up for its academic track while enrollment in the technical-vocational-livelihood track was at 39.15 percent.
_______________________________________________________________________________________
More rural banks closing this year
By Lawrence Agcaoili (The Philippine Star) | Updated August 21, 2016 - 12:00am

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has already closed 15 banks so far this year, exceeding the number of closures made a year ago as it tightened its lid over financial institutions.

The BSP’s Monetary Board has issued Resolution 1464, prohibiting the Rural Bank of Claveria (Cagayan) from doing business in the Philippines pursuant to Sec. 30 of Republic Act 7653 or The New Central Bank Act.

The closed rural bank was placed under the supervision of the state-run Philippine Deposit Insurance Corp. (PDIC).

The Monetary Board earlier issued Resolution 1317 last July 28 prohibiting the Rural Bank of Cabadbaran (Agusan) Inc. from doing business in the Philippines.

The BSP has also ordered the closure of the Rural Bank of Alabat (Quezon), Rural Bank of Cabadbaran (Agusan), Rural Bank of Siaton (Negros Oriental), New Rural Bank of Binalbagan (Negros Occidental), Comsavings Bank with trade name GSIS Family Bank, Rural Bank of Amadeo (Cavite), Surigao City Evergreen Rural Bank, Rural Bank of Malinao (Aklan), Koronadal Rural Bank Inc., Rural Bank of Panay, Rural Bank of Basay (Negros Oriental), Rural Bank of Bayawan (Negros Oriental), Lapu-Lapu Rural Bank, and Rural Bank of Villaviciosa (Abra) Inc.

The BSP is looking at consolidating the Strengthening Program for Rural Banks (SPRB) Plus and the Consolidation Program for Rural Banks (CPRB) to entice mergers among smaller banks with the entry of stronger foreign banks into the country.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Based on the latest report of the BSP, the number of banks operating in the Philippines reached 622 in end March this year, down from 646 in the same month of 2015.

The number of big banks or universal and commercial banks increased to 41 as of the end of March from 36 a year earlier with the entry of new foreign banks following the passage of RA 10641.

On the other hand, the number of thrift banks declined to 66 in end March from from 69 a year ago while the number of rural and cooperative banks decreased to 515 from 541.
_______________________________________________________________________________________
Cantilan Bank Wins Highest Post in Landbank’s Gawad CFI
Posted: 12 Aug 2016 01:36 AM PDT

Cantilan Bank has been named as the country’s No. 1 Most Outstanding Countryside Financial Institution and Best CFI Availer for Agri-Agra Loans during the 18th edition of Gawad CFI by the Land Bank of the Philippines (Landbank), a government financial institution focusing on serving the needs of rural communities.

“We are one with Landbank in helping develop and sustain the livelihood of the people in the countryside. These awards will help us further our endeavor to deliver the best financial services to the communities that we serve,” said CBI Chairman Lt. Gen. William K. Hotchkiss III (Ret.) who received the awards during the Gawad CFI Awarding Ceremonies held at the DM Hall, Landbank Plaza on August 10, 2016.

“We are thankful that our financial inclusion efforts in the countryside have been recognized by Landbank for six consecutive years now,” he added.

Department of Finance Secretary Carlos G. Dominguez III, the event’s guest of honor, congratulated the bank for its outstanding performance. Aside from Gawad CFI awardees, Landbank also honored this year’s winners of Gawad PITAK, Gawad Entrepreneur, Gawad KAAGAPAY, and Gawad MFI.

Gawad CFI is an annual awarding ceremony of Landbank which gives recognition to the efforts of outstanding financial institutions who have made a valuable impact in countryside development, benefiting more farmers, fisherfolk, and small-medium enterprises.

Recently, Cantilan Bank also bagged an award from the Small Business Corporation as Most Distinguished Partner in Credit Guarantee.ntice mergers among smaller banks with the entry of stronger foreign banks into the country.
_______________________________________________________________________________________
BSP closes 14th bank this year
Rappler.com
Published 8:00 AM, August 03, 2016
Updated 8:00 AM, August 03, 2016

14TH BANK CLOSED. Rural Bank of Alabat is the 14th financial institution closed by the central bank this year. Photo from www.pdic.gov.ph

MANILA, Philippines – A total of 14 banks in the Philippines have been shut down in the first half of 2016, as the Bangko Sentral ng Pilipinas (BSP) steps up its campaign against weak players.

The latest to be closed is the Rural Bank of Alabat (Quezon), which has been prohibited from doing business in the country and placed under the supervision of the state-run Philippine Deposit Insurance Corporation (PDIC).

The Rural Bank of Alabat is a 3-unit rural bank, with its head office located in Alabat, Quezon. (READ: Fewer Philippine banks in 2015)

Latest available records showed that the closed rural bank had 15,359 accounts, with total deposit liabilities of P121 million.

Total insured deposits under the Rural Bank of Alabat amounted to P111.5 million, involving 99.8% of total deposit accounts.

The Rural Bank of Alabat is the 14th bank closed by the BSP this year, matching the number of banks shuttered by the bank regulator in 2015.

Closure of more banks

The country's central bank said it expects the closure of more banks.

The Rural Bank of Alabat is the 3rd bank to be ordered closed by the BSP following the effectivity of Republic Act No. 10846 that amended the PDIC Charter.

Banks ordered closed by the BSP so far include:

New Rural Bank of Binalbagan (Negros Occidental) Incorporated
GSIS Family Bank
Rural Bank of Amadeo (Cavite) Incorporated
Surigao City Evergreen Rural Bank Incorporated
Rural Bank of Malinao (Aklan) Incorporated
Rural Bank of Bayawan
Lapu-Lapu Rural Bank Incorporated
Rural Bank of Villaviciosa (Abra) Incorporated
Koronadal Rural Bank Incorporated
Rural Bank of Panay Incorporated
Rural Bank of Basay (Negros Oriental) Incorporated
Rural Bank of Siaton (Siaton, Negros Oriental) Incorporated
Rural Bank of Cabadbaran (Agusan) Incorporated
BSP data showed the number of banks operating in the Philippines declined to 622 in end-March this year, from 646 in end-March last year.

But the number of big banks or universal and commercial banks went up to 41 from 36 with the entry of more foreign players after former president Benigno Aquino III signed Republic Act No. 10641 in July last year.

The number of thrift banks reached 66 in end-March this year from 69 in end-March last year, while the number of rural and cooperative banks decreased to 515 from 541. (READ: Bank of Tokyo Mitsubishi acquires 20% stake in Security Bank)

The BSP is consolidating the Strengthening Program for Rural Banks (SPRB) Plus and the Consolidated Program for Rural Banks (CPRB) to entice mergers among smaller banks with the entry of stronger foreign banks into the country. – Rappler.com
_______________________________________________________________________________________
BSP shutters RB Cabadbaran (Agusan) and RB Alabat (Quezon)
July 30, 2016 05:21pm

Agusan del Norte and Quezon, due to insolvency.

In a bulletin, state-run Philippine Deposit Insurance Corp. (PDIC) said the Monetary Board---the Bangko Sentral ng Pilipinas' (BSP) highest policy-making body---on July 28 prohibited Rural Bank of Cabadbaran (Agusan) Inc. from doing business.

Rural Bank of Cabadbaran, whose head office was located in Cabadbaran City, the capital of Agusan del Norte, had three other offices: one branch each in the cities of Butuan and Cagayan de Oro as well as a microbanking office in Gingoog City.

Likewise placed by the Monetary Board under the PDIC's receivership also on July 28 was Rural Bank of Alabat (Quezon) Inc., whose head office was located in Alabat, Quezon.

Rural Bank of Alabat had two branches in the towns of Atimonan and Mauban in the same provinces.

The PDIC took over the two banks' affairs, assets, branches as well as records on July 29.

So far this year, the BSP placed 11 other rural banks under PDIC receivership: Rural Bank of Villaviciosa (Abra) Inc., Lapu-Lapu Rural Bank Inc., Rural Bank of Bayawan (Negros Oriental) Inc., Rural Bank of Basay (Negros Oriental) Inc., Rural Bank of Panay Inc., Koronadal Rural Bank Inc., Rural Bank of Malinao (Aklan) Inc., Surigao City Evergreen Rural Bank Inc., Rural Bank of Amadeo (Cavite) Inc., New Rural Bank of Binalbagan, and Rural Bank of Siaton (Siaton, Negros Oriental) Inc.

Including the thrift bank GSIS Family Bank, which the Monetary Board shuttered in May, there were 14 closed banks thus far in 2016.

But GSIS Family Bank may find a new lease of life as "less than 10" firms have expressed interest to rehabilitate the lender previously controlled by state-run pension fund Government Service Insurance System, according to the PDIC.

Rural Bank of Alabat and Rural Bank of Cabadbaran were the second and third banks, respectively, closed since Republic Act No. 10846, which amended the PDIC's charter, took effect in June.
_______________________________________________________________________________________
P1-B MSME credit line pushed
By: Amy R. Remo
@inquirerdotnet
Philippine Daily Inquirer
02:28 AM July 18th, 2016

TRADE Secretary Ramon Lopez plans to push for the establishment of a P1-billion regional credit access for micro, small and medium sized enterprises (MSMEs) to help address one of the biggest hurdles faced by local firms.

This was one of the poverty-alleviation measures proposed by President Duterte during his campaign earlier this year.

“I will have to ask the President about that. That will benefit the MSMEs and so hopefully, we can get that support from the President and reflect that immediately in the next budget,” Lopez said in an interview with the Inquirer.

According to Lopez, the additional amount would also help fund more shared services facilities (SSF), a flagship program of the Department of Trade and Industry that provides MSMEs with equipment or infrastructure that can be used by a number of beneficiaries such as cooperatives, institutions and communities.

A portion of the fund can also be used for the Negosyo Centers for productivity enhancement programs and for further training, seminars and mentoring activities.

“This [additional credit] only means that we will be able to do more. This is exciting for us because in teaching the nation how to fish, we will be able to feed the nation many lifetimes. This is the mantra that we are following. What we want is to empower our MSMEs,” Lopez explained.

During the campaign, the Duterte camp promised that MSMEs would be able to borrow capital from the government to expand their business. Currently, small businessmen have nobody to turn to but loan sharks while rich businessmen could get capital from their family, bank or by selling their properties.
_______________________________________________________________________________________
BSP shuts down Negros Oriental rural bank

Monetary authorities have shuttered a rural bank in Negros Oriental due to insolvency, the 12th lender closed down this year.

In a bulletin, state-run Philippine Deposit Insurance Corp. (PDIC) said the Monetary Board—the Bangko Sentral ng Pilipinas’ highest policy-making body—last July 7 prohibited the Rural Bank of Siaton (Siaton, Negros Oriental) Inc. from doing business.

The single-unit bank held office at Km. 50, National Highway, Poblacion Siaton, Negros Oriental.

The rural bank’s assets and affairs had been placed under PDIC receivership pursuant to Republic Act (RA) No. 7653 or The New Central Bank Act.

The PDIC took over the bank on July 8.

Its bank information sheet filed with the PDIC showed that as of end-2015, the rural bank was owned by the following: Emilio C. Macias II (with a 28.35-percent share); Melba L. Macias (16.69 percent); Caroline Ann M. Villa (12.37 percent); Victoriano L. Tizon (4.81 percent); and Emilio L. Macias III, Lamberto L. Macias, Erwin Michael L. Macias, Edward Marck L. Macias and Eileen Marie M. Pinili (3.85 percent each).

Eileen Marie M. Pinili was the bank’s president and chair.

As of end-March, Rural Bank of Siaton had 1,301 accounts with deposit liabilities totaling P46.6 million, of which 87.3 percent or P40.7 million had been insured.

The PDIC assured depositors that “all valid deposits shall be paid up to the maximum deposit insurance coverage of P500,000.”

Besides Rural Bank of Siaton, the BSP earlier placed 10 other rural banks under PDIC receivership this year – Rural Bank of Malinao (Aklan) Inc., Koronadal Rural Bank Inc., Rural Bank of Panay Inc., Lapu-Lapu Rural Bank Inc., Rural Bank of Villaviciosa (Abra) Inc., Rural Bank of Bayawan (Negros Oriental) Inc., Rural Bank of Basay (Negros Oriental) Inc., Surigao City Evergreen Rural Bank Inc., Rural Bank of Amadeo (Cavite) Inc., and New Rural Bank of Binalbagan.

Including the thrift bank GSIS Family Bank, which the Monetary Board also shuttered last month, 12 banks have been shut down in 2016.
_______________________________________________________________________________________
New law expedites payments to depositors of closed banks
By Lawrence Agcaoili (The Philippine Star) | Updated July 10, 2016 - 12:00am

MANILA, Philippines – State-run Philippine Deposit Insurance Corp. (PDIC) said depositors of banks ordered closed by the Bangko Sentral ng Pilipinas (BSP) now have quicker access to their insured deposits.

PDIC president Cristina Que Orbeta said Republic Act 10846 that amended its charter provides payment of deposit insurance would now be based on depositors’ records and not just solely on the basis of records maintained by the closed bank.

Orbeta said this addresses the inconvenience caused to depositors by the absence of deposit records of closed banks or by irregularities in the recording, documentation and deposit record-keeping of a closed bank.

She added depositors’ evidence of deposits and records include savings passbooks, certificates of deposit, ATM cards, transaction receipts, check books and other bank records.

She stressed the need for depositors to always secure their deposit records and keep their information updated with their banks.

The PDIC reported there had been several instances when the records of closed banks were found to be in a state of disarray upon PDIC’s takeover. In situations like these, payout operations encountered delays due to the need to examine carefully deposit records of the bank causing undue inconvenience to depositors.


The new law also allows gross settlement of deposit insurance claims, except in instances when depositors have past due loans and when their deposits are under hold-out agreements with the bank.

This means loans that are current would no longer be deducted from the amount of deposit insurance to be paid by PDIC to the depositors of closed banks, enabling the borrowers to benefit from the payment period agreed with the bank.

“This will expedite the payment of deposit insurance claims and quicker access to their trapped funds. Borrowers are, however, reminded of their responsibility to continue to pay their loans. PDIC, as liquidator, will continue to collect loans owed to the bank,” Orbeta said.

The new law empowers PDIC to further strengthen depositor protection, minimize disruption in the financial system in times of bank closures, promote financial inclusion through continued access to banking services, strengthen PDIC as an organization; and ensure PDIC policies are aligned with international best practices.

The BSP has so far ordered the closure of 11 banks consisting of 10 rural banks and one thrift bank this year.

These include the New Rural Bank of Binalbagan (Negros Occidental) Inc.; GSIS Family Bank; the Rural Bank of Amadeo (Cavite) Inc.; Surigao City Evergreen Rural Bank Inc., Rural Bank of Malinao (Aklan) Inc.; the Rural Bank of Bayawan; Lapu-Lapu Rural Bank Inc. based in Carcar City, Cebu; the Rural Bank of Villaviciosa (Abra) Inc.; Koronadal Rural Bank Inc.; Rural Bank of Panay Inc.; and Rural Bank of Basay (Negros Oriental) Inc.

The BSP is looking at consolidating the Strengthening Program for Rural Banks (SPRB) Plus and the Comprehensive Program for Rural Banks (CPRB) to entice mergers among smaller banks with the entry of stronger foreign banks into the country.

Latest data from the BSP showed the number of banks operating in the Philippines decline to 622 in end-March this year from 646 in end March last year amid the continued consolidation of banks as well as the exit of weaker players particularly rural banks.

The number of big banks or universal and commercial banks went up to 41 in end March this year from 36 in end March last year with the entry of new foreign banks.

These comprised of 21 universal banks consisting of 12 private domestic banks, three government banks, and six foreign bank branches as well as 20 commercial banks comprised of five private domestic banks, two foreign bank subsidiaries, and 13 foreign bank branches.

The BSP said the number of thrift banks reached 66 in end March this year from 69 in end March last year while the number of rural and cooperative banks decreased to 515 in end from 541.
_______________________________________________________________________________________
BSP orders rural bank closed

MANILA -- A single unit Negros Occidental-based rural bank has been ordered closed by the Bangko Sentral ng Pilipinas due to high-level of deposit liabilities.

In a statement, the Philippine Deposit Insurance Corporation said it will take over the New Rural Bank of Binalbagan (Negros Occidental) after the central bank's policy-making Monetary Board put the bank under PDIC receivership on June 9, 2016.

Latest data show that the bank had 480 accounts with total deposit liabilities of P8.24 million as of end-March 2016.

PDIC said 98.24 million or 98.3 percent of the deposits are insured.

With the takeover, PDIC will collate bank records and verify these to be able to pay depositors with valid accounts and with balances of up to P100,000 and below as soon as possible, except when they have outstanding obligations with the banks.

Accounts holders with deposits higher than P100,000, on the other hand, need to file deposit insurance claims.

Account holders are given until June 16, 2016 to update their addresses with the bank while depositors who are required to file deposit insurance claims may start the process by June 23, 2016.*PNA
_______________________________________________________________________________________
BSP to boost cyber security for PHL banking industry
Published June 6, 2016 7:25pm
By JON VIKTOR D. CABUENAS, GMA News

The central bank is boosting efforts to improve cyber security measures of lenders in the country by creating a new division to ensure the transactions of Philippine banks are clean.

"We created a new division focused particularly on cyber security issues to strengthen our capacity in dealing with this," Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. told reporters over the weekend in Cebu City.

The new division, he said, will do surveillance and information dissemination across the country. It will "go around and examine institutions and verify and test the ability of those institutions to manage cybersecurity," Espenilla noted.

"This one is for supervised entities under the BSP. 'Yun ang kanilang main focus," he added.

Among the financial institutions under BSP supervision are banks (universal, commercial, thrift, rural, and cooperative) and other non-bank firms such as pawnshops.

Espenilla said the BSP is currently looking at options to regulate virtual currencies. "In our case, we don't regulate but given the increasing volume (of users), we are now that much closer to formally regulating virtual currencies," he said.

In the Philippines, Bitcoin transactions amount $2 million to $3 million a month. It is the most widely used virtual currency in the coutnry.

"It is not a small amount of transactions," Espenilla said.

The central bank is studying the possibility of regulating virtual currencies to safeguard the public from threats, he noted.

"We are looking at it for two important reasons: aspects of money laundering, and consumer protection concerns," he said, noted the public has an important role in this as well.

"Our belief is that BSP cannot always be around to protect the public. The public must, first and foremost, learn to protect itself," he added. – VDS, GMA News
_______________________________________________________________________________________
Two rural bank groups apply for CPRB
May 30, 2016 9:18 pm
By MAYVELIN U. CARABALLO

State-run Philippine Deposit Insurance Corp. (PDIC) said two groups involving a total of 10 rural banks have applied for the Consolidation Program for Rural Banks (CPRB).

CPRB is a bank strengthening program that aims to bring about a stronger and less fragmented banking system and provide opportunities to enhance rural banks’ business prospects and ability to face increased competition.

It is a tripartite program of the PDIC, Bangko Sentral ng Pilipinas (BSP), and Land Bank of the Philippines that was launched in August last year to encourage consolidation among rural banks to improve financial strength and enhance their viability.

Rural banks that avail of CPRB will receive assistance in financial advisory, business process improvement, and capacity building.

These include training on credit evaluation and administration, audit and internal control, personnel management, accounting/record keeping, treasury, information technology, and governance.

LandBank may also provide equity participation, while the BSP will observe full flexibility in the grant of incentives to participating banks.

Proponent banks that form a group of at least five rural banks with head offices or majority of branches located within the same region or area are eligible to avail of the CPRB.

A rural bank with head office in a nearby region may also apply, provided that all program objectives are met.

PDIC President Cristina Que Orbeta expressed optimism that more rural banks will soon avail of the CPRB and maximize its benefits for their expansion and institutional strengthening.

“I trust that more banks will see CPRB as a beneficial program for the whole rural banking industry and will therefore take advantage of this opportunity,” she said.

The PDIC assured the depositing public that consolidation among banks will be beneficial to the industry and will strengthen the banking system.

While consolidation reduces the number of operating banks, the CPRB ensures that the remaining consolidated banks are financially stronger with higher capital bases, and equipped to provide improved services to depositors in terms of upgraded facilities, expanded banking products, and enhanced management and governance.

The applications from these rural banks signify their recognition of the advantages to be gained from CPRB in improving their business capabilities and diversifying their respective markets, the PDIC said.

“Interested rural banks may visit the PDIC website, www.pdic.gov.ph, to view the salient features, implementing guidelines and documentary requirements of the CPRB,” it added.
_______________________________________________________________________________________
BSP eases regulations in drought areas
May 20, 2016

The Bangko Sentral ng Pilipinas (BSP) has moved to allow lenders in areas affected by the drought caused by the El Niño phenomenon to provide debt relief to their borrowers by granting regulatory and rediscounting relief measures to banks and other financial institutions.

“Due to severe drought conditions affecting several provinces, borrowers in the affected areas could face difficulty in paying their loans,” the central bank said late Thursday.

These circumstances warrant BSP’s immediate response through the grant of regulatory and rediscounting relief measures to banks and non-bank financial institutions with quasi-banking functions (NBQBs) with head offices or branches located in the areas which have been or may be declared by the National Disaster Risk Reduction Management Council or the local government, upon the recommendation of the Regional or Local Disaster Risk Reduction Management Council as under a state of calamity, the BSP said.

By providing regulatory relief, the BSP said these financial institutions would be able to provide debt relief to their borrowers.

Approved on May 13 by the Monetary Board, the central bank said for thrift banks/rural banks/cooperative banks and NBQBs, the temporary relief measures were the exclusion of existing loans of borrowers in affected areas from the computation of past due ratios, provided these are restructured or given relief; reducing the 5-percent general loan-loss provision to 1 percent for restructured loans of borrowers in the affected areas; and non-imposition of penalties on legal reserves deficiencies with head office or branches in the affected areas.

The relief also include moratorium on monthly payments due the BSP for banks with ongoing rehabilitation programs; and subject to BSP approval, booking of allowance for probable losses on a staggeredbasis over maximum of five years for all types of credit extended to individual and businesses directly affected by the phenomenon.

For all banks, the regulatory relief allows banks to provide financial assistance to their officers and employees who were affected by the calamity, including assistance that may not be within the scope of the existing BSP-approved Fringe Benefit Program.

For all rediscounting banks, the relief includes the granting of a 60-day grace period to settle the outstanding rediscounting obligations as of declaration date of a state of calamity with the BSP; and allowing banks to restructure with the BSP, on a case-to-case basis, the outstanding rediscounted loans of borrowers affected by El Niño.

“These measures will be in effect for a period of one (1) year, reckoned from the date of declaration of a state of calamity, and covered by additional specific and other prudential conditions,” the BSP concluded.
_______________________________________________________________________________________
PHL lenders post double-digit asset growth
22 Oct 2013
Written by Bianca Cuaresma

The country’s various lenders double-digit asset growth in the first eight months totaling P9.28 trillion, latest data from the Bangko Sentral ng Pilipinas (BSP) show.

This was some P1.59 trillion or 20.71 percent higher than total resources last year of only P7.685 trillion.

The growth in resources was also faster than the 19.6-percent growth posted in July this year. About P38.1 billion was added to the Philippine banking system’s total resources from July to August this year. The banks’ assets in July stood at P9.24 trillion.

Universal and commercial banks, which comprise about 72.3 percent of total bank resources in the country, was the primary driver in the rise in resources during the period. At end-August this year, resources of universal and commercial banks totaled P8.32 trillion, about 20.88 percent or P1.44 trillion higher than last year when this totaled P6.89 trillion. This was also about P35 billion higher than the P8.28 trillion posted the previous month.

Thrift banks, which own around 6.6 percent of the total resources of Philippine banks, also posted double-digit growth in the first eight months of the year. From the P609.8 billion seen in January to August last year, thrift banks’ resources grew by about 25.25 percent, or about P154 billion, to reach P763.8 billion in the January to August this year. From July to August, thrift bank resources grew larger by 3.1 billion from the P760.7 billion in July this year.

The August data on the resources of rural banks has not yet been made official available by the BSP. The latest data for rural banks show assets at P190.1 billion as of end-September last year.

The resources of non-banks as of August this year is also not yet available. As of March this year, total resources of non-bank financial institutions stood at P2.231 trillion. These brought the August total resources of the Philippine financial system to P11.51 trillion, about P1.716 trillion or 17.55 percent higher from the same period last year.
_______________________________________________________________________________________
Soured loans held by small domestic banks grew by 10%

Soured loans held by small domestic banks grew by 10 percent in the first quarter amid aggressive lending activities, based data released by the central bank. In a statement, the Bangko Sentral ng Pilipinas (BSP) said the provisions of thrift, rural and cooperative banks for these nonperforming loans (NPL) also rose as they sought to cover possible losses that might affect the welfare of their depositors.

The combined nonperforming loans (NPLs) of thrift, rural and cooperative banks represented 7.77 percent of their total loan portfolio of P568.71 billion at the end of the first quarter this year.

The BSP attributed the increase in the industry’s NPL ratio this year from 7.61 percent last year to the 10.3-percent year-on-year rise in soured loans vis-à-vis the 8-percent increase in loan portfolio in the same period.

The banks’ loan loss reserves for bad loans, meanwhile, stood at 66.52 percent of NPLs in March, up from the 64.60 percent a year ago.

“Provisioning for NPLs is a prudential measure for mitigating potential credit losses,” the BSP said.

The risk of small banks’ level of bad loans undermining the health of the country’s financial system was downplayed by the central bank, saying that thrift banks made up only 10.47 percent of the total industry. Rural and cooperative banks, meanwhile, were just 2.89 percent and 0.20 percent, respectively, of the Philippine banking system’s total loan portfolio in March this year.

NPLs of universal and commercial banks, which dominate the country’s banking system, eased to 2.68 percent of their loan portfolio from 2.75 percent in March and 3.01 percent in June of 2012.

The BSP said local banks were able to resist the temptation of relaxing their standards and lend excessively to the public to increase profits. It said bank lending standards remained high despite the ample liquidity in the system.

The rise in NPLs was attributed to rural and cooperative banks, which saw bad loans reach 13.26 percent and 14.22 percent of their respective loan portfolios.

Thrift banks saw their NPLs ease to 6.13 percent of their loan portfolio as of the end of March, from 6.48 percent a year ago. This was matched by a slight rise in the thrift banks’ loan loss reserves to 70.43 in March from 69.64 percent a year ago.
_______________________________________________________________________________________
AUB's rural bank unit to acquire Pampanga bank
ABS-CBNnews.com
Posted at 10/04/2013 3:17 PM | Updated as of 10/04/2013 3:17 PM

MANILA, Philippines - The Monetary Board has approved in principle Asia United Bank's rural bank subsidiary's acquisition of a Pampanga bank.

In a statement, AUB said its subsidiary Rural Bank of Angeles is acquiring the banking business of the Cooperative Bank of Pampanga (CBP).

CBP has 204 member cooperatives in various locations, including Pampanga, Cabanatuan and Davao. As of end-2012, it had total assets of P290.8 million and has seven branches -- San Fernando, Apalit, Sta. Ana, Angeles, Floridablanca, Lubao and Mabalacat.

"CBP presents a unique opportunity and will allow RBA to expand its presence and footprint in Pampanga... With the resources and integration experience of RBA and its parent, AUB, we are confident of recapitalizing and revitalizing the business of CBP," said bank president Ronald Joseph Fernandez.

"While preparation for the completion of the acquisition is ongoing, AUB is prepared to advance additional new capital to CBP to ensure the servicing of CBP's liabilities and its stable and continued operation," he added.

Since AUB acquired Angeles City-based RBA in July 2009, the rural bank has already returned to profitability and currently has 11 branches and other banking offices in Pampanga and Tarlac. RBA now has total assets of Php416.1 million and a net income of Php10.9 million as of December 31,2012.The acquisitions of CBP and RBA, in addition to Asiatrust Develop.
_______________________________________________________________________________________
BSP lifting cap on bank lending facility

“The BSP’s peso rediscounting window will turn into an open-volume facility effective Nov. 15 this year, meaning requests of banks to the facility will be granted regardless of amount subject to compliance with pre-determined eligibility requirements,” BSP Governor Amando M. Tetangco, Jr. told reporters via e-mail on Monday night.

In a text message on Monday, BSP Deputy Governor Diwa C. Guinigundo explained that the move will “remove the P20-billion budget that the central bank has set aside for the peso rediscounting facility… for universal and commercial banks.”

The rediscount facility is a refinancing window from which banks borrow money using promissory notes and other loan papers of its borrowers as collateral, according to the central bank.

The central bank announced in August that it is restructuring the peso rediscounting facility to “align it further with the BSP’s market-based monetary operations framework and with international central banking practice of scaling down directed credit operations… as it remains committed to providing the appropriate level of liquidity to the banking system to ensure sustained funding for the country’s growth requirements to the extent that the inflation outlook will allow.”

BSP also said that by next month there will be two separate rediscounting windows. Rediscounting Window I will be for universal and commercial banks, while Rediscounting Window II will be for thrift, cooperative and rural banks.

With the absence of a ceiling, Mr. Guinigundo said the amount banks can borrow from the facility will depend on their capital, assets, management, earnings, liquidity, and sensitivity (CAMELS) rating, which measures a bank’s financial health and ability to pay obligations.

“There is a scoring system based on the banks net worth and compliance with CAMELS rating,” he said.

Loan rates for universal and commercial banks are pegged at BSP’s lending rate of 5.5%, while that for thrift, rural and cooperative banks is set at BSP’s 3.5% borrowing rate. As of September, banks had availed of P17.32 billion in loans from BSP’s rediscount facility, lower than the P32.761 billion recorded in the same period last year. -- A. R. R. Gregorio
_______________________________________________________________________________________
World Bank Group President: No More Business as Usual
October 11, 2013

Kim announces changes to align staff, finances and priorities to meet strategic goals
WASHINGTON, October 11, 2013—World Bank Group President Jim Yong Kim today announced a set of sweeping changes to align the staff, finances, and priorities of the global institution to meet the twin goals of ending extreme poverty by 2030 and boosting shared prosperity for the bottom 40 percent of the population in developing countries.

Addressing representatives of the Bank Group’s 188 member countries at the plenary of the World Bank/International Monetary Fund Annual Meetings, Kim noted that for too long, the organization had not followed its own advice and had avoided tough choices.

“That’s changing. We are taking our own medicine. We will show much more financial discipline than we have in the past in order to become more efficient and identify new ways to reduce spending. Just as we tell finance ministers, we also need to plan for the longer term, shoring up our revenue base, seeking ways to save, and building a stronger foundation for years to come,” said Kim.

Kim praised the hard work of Bank Group staff and said he wanted to create a structure that brings out the best of their talents and expertise.

“We can’t revert to business as usual. When I started my tenure at the World Bank Group some 16 months ago, I discovered a staff with a tremendous depth of knowledge and experience. I also found a staff frustrated with the institution. Many wanted their work to have greater impact. They chafed at a bureaucracy that had turned our six regional units into silos, with each one reluctant to share its technical expertise with the others.”

Over the next three years, the World Bank will find at least a $400 million reduction in annual administrative costs, said Kim. These savings will directly benefit clients, as the organization will work to reinvest these resources toward new financing.
Kim noted that in addition to savings, the Bank Group needed to reform the way it designs its budget, to align budgets with strategy, to selectively invest in the future, and to aggressively explore new ways to grow revenue to better serve our clients.

“If we have high aspirations for the poor, if our work is to be aligned with our goals, we must be as efficient and focused as possible,” said Kim.

Kim illustrated the importance of ending extreme poverty with a recent World Bank report which found that of those in poverty, one in three is a child.

“For all the people living in extreme poverty, 400 million are children. What more motivation do we need to accelerate progress toward the goal of ending extreme poverty by 2030? How can we in good conscience not do all we can to lift 400 million children, their families, and hundreds of millions of others out of poverty and into a life of opportunity?’’
To make the poverty goal more urgent, Kim hailed the Bank’s new interim goal of cutting extreme poverty roughly in half by 2020, from its rate of 18 percent in 2010 to 9 percent in 2020. “If we are going to be on the path of reaching 3 percent of population living in extreme poverty by 2030, we must get to 9 percent by 2020,” said Kim.

In addition, Kim announced a new initiative to provide universal financial access to all working-age adults by 2020.
“Globally, 2.5 billion adults have no mechanisms to save money, let alone pay bills through a transactional account or through a mobile phone. We believe we can chart a path toward universal financial access by bringing together multiple approaches and technologies. This is exactly the type of ambitious project that can help lift many people, especially women, out of poverty.”

Kim called for a new approach to measuring whether Bank-financed projects are successful and said he was creating a “Presidential Delivery Unit” to focus on the Bank Group’s performance as an institution and to share data and lessons across the institution and with the rest of the world.

Kim described three aspects of the Bank Group’s work in which the new delivery unit will measure outcomes:
• “First, we know we must decrease administrative barriers. We promise to reduce transaction times by a third from conception of a project to first disbursement of funds.

• Second, we must become a better listener. Last year, we had beneficiary feedback on 34 percent of our projects. We promise that for our projects with clear beneficiaries, we will get feedback – from every single one of them, 100 percent.

• Third, we know that our partners and clients need to know where we work in order to better coordinate all of our collective resources. We promise to add rich details to our maps so that anyone will be able to go online, click on maps, and immediately learn where we are working and what we are doing.”

Kim told assembled member countries that the Bank was recommitting itself to work in fragile and conflict-affected states, with significant increases in financing in the next three years. However, Kim noted that having transformational impact in these fragile states depended upon donor support for the International Development Association (IDA), the World Bank’s fund for the poorest, which is seeking a replenishment of resources in 2013.

“We need a strong IDA replenishment this year. It will help create more jobs, increase educational opportunities for girls, and address climate change risks,” said Kim.

Kim concluded with a unifying call for the international community to demonstrate its commitment to the world’s poorest:
“Our purpose is clear, our voice unwavering. No one should live in the abysmal conditions of extreme poverty, living on a dollar or two a day. Extreme poverty in our world is morally reprehensible, and more painful to witness with each passing day. We must urgently lift a billion people from extreme poverty, help them to regain dignity, help them find hope, and help them change their own lives -- and the whole world’s future -- for the better.”
_______________________________________________________________________________________
Bangko Sentral OKs merger of 6 co-op banks
Philippine Daily Inquirer
2:40 am | Thursday, October 10th, 2013

The central bank has approved the merger of six small banks into one stronger bank that would have a branch network in Luzon, Visayas and Mindanao.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the consolidation of six cooperative banks was approved under the regulator’s Strengthening Program for Cooperative Banks (SPCB), which extends incentives to merging banks.

The six banks were Cooperative Bank of Agusan del Sur, Capiz Settlers Cooperative Rural Bank, Cooperative Bank of Camarines Norte, Cooperative Bank of Leyte, Sorsogon Provincial Cooperative Bank and Southern Leyte Cooperative Bank.

In addition, the National Confederation of Cooperatives said it would infuse fresh capital into the merged bank, which would be named Network Consolidated Cooperative Bank (NCCB).

“This major event heralds the acceleration of the consolidation of the cooperative banking industry, aimed at contributing further to the health and soundness of the entire banking system,” the BSP said in a statement.

“Ultimately, this should redound to the benefit of the various stakeholders, including the public,” the regulator said.
The SPCB is an incentive program conceptualized by the BSP, Philippine Deposit Insurance Corp. (PDIC) and Land Bank of the Philippines. The program seeks to encourage mergers and acquisitions in the industry to strengthen the cooperative banking sector.

Incentives include leeway on certain regulations and financial assistance for eligible banks.

“This program is in recognition of the cooperative banks’ role in providing essential financial services in the economy, particularly in providing adequate banking services in local communities and in supporting growth of rural economies,” the BSP said.—Paolo G. Montecillo
_______________________________________________________________________________________
T-bills down to lowest level
By Zinnia B. Dela Peña (The Philippine Star) | Updated October 8, 2013 - 12:00am

MANILA, Philippines - Treasury bill (T-bill) rates declined to their lowest level yesterday as investors took sanctuary in government securities amid deepening uncertainties in the US as well as excess liquidity in the domestic market.
The government raised a total of P20 billion with investors offering a total of P108.66 billion.

The 91-day T-bill yield tumbled to an all-time low of .001 percent, almost reaching zero percent as investors swamped yesterday’s auction. This was a significant decline from the .866 percent set in the previous auction.

Tenders for the the three-month bills reached P38.59 billion or more than nine times the P4 billion on offer.

The interest rate on the 182-day paper plunged 83 basis points to an average of .09 percent. Bids for the six-month bills amounted to P35.46 billion or nearly six times the P6 billion available.

The yield on the the 365-day papers declined by 76.5 basis points to .955. The government accepted P10 billion out of the P34.61 billion worth of bids received.

Deputy Treasury Eduardo Mendiola attributed the overwhelming demand to the crisis hounding the US government now. “Markets are shifting to short-term instruments and selling longer tenor securities partly due to what’s happening in the US,” he said.

Mendiola said the upgrade by Moody’s of the Philippines’ credit rating to investment grade has also buoyed market sentiment.

He, nevertheless, believes that the US will bounce back and fix its house in order. “The US is a big economy and democracy is working well. Don’t think the US will allow itself to default on its debt,” Mendiola said.

Despite enormous liquidity in the financial system, the government is sticking to its P120 billion borrowing program for the fourth quarter this year. The borrowing is composed of P40 billion worth of T-bills and P80 billion worth of T-bond.

The Treasury will offer P20 billion worth of 20-year retail treasury bonds (RTBs) in October, P30 billion worth of 7-year RTBs in November, and another P30 billion worth of RTBs in December.
_______________________________________________________________________________________
Channeling funds to housing development in the countryside  
Posted: 03 Oct 2013 06:03 PM PDT

Shelter is one of the basic requirements of human needs. For an ordinary Filipino, owning a house provides a sense of economic security and dignity in the society. In the rural areas, particularly agricultural workers, low-income earners and even some families of Overseas Filipino Workers, owning a house would give them some sort of ‘pride’ seeing their little hard-earned money invested in something that appreciates in value over time.

However, it is a given fact that owning a house is costly. An average house of about 100 sq. m. goes for a total contract price of around P5 million, including land. Apart from owning, even some home improvements would also involve certain expenses. Several contractors might quote P20,000 per sq. m. to include labor and materials from plan to turnover of a house. An average house would cost around P12,000 per sq. m. using materials of lesser quality.

With this scenario, a typical Filipino residing in a rural area and earns a little might perceive the opportunity of owning or improving a home bleak. This is where housing loans step in.

While bigger banks offer concrete housing loans, not all low-income earners can access these services as they were often for people who already have a steady source of income. Rural banks, on the other hand, extend housing microfinance that offers small, incremental loans that fit with the way poor people build or improve houses, progressively over time. This emanated from the Bangko Sentral ng Pilipinas (BSP) Circular 678 or the Micro-Housing Loan.

Apart from the support rural banks receive from the regulators, government-controlled corporations such as Home Guaranty Corporation (HGC) made it possible for an improved housing loan system for underprivileged Filipinos, giving them more opportunities to finance their own homes. The HGC, which is under the supervision of the Housing and Urban Development Coordinating Council (HUDCC) and chaired by Vice President Jejomar C. Binay, supports homeownership among Filipinos by uplifting financial institutions to lend to individual homebuyers and housing developers.

The HGC, through its two latest programs – the Guaranty Program to the Countryside through Rural Banks and the Guaranty Program for Microfinance and Small Loans for Home Improvement – extends guaranty lines to financial institutions and secures investments for home-lending programs with the goal of encouraging financial institutions (such as rural banks) to lend more for housing.

Under HGC Guaranty Programs, the government guarantees the payment of HGC’s obligations. The same is likewise beneficial for both the banks and the borrowers as the latter could avail up to 90% of the appraisal value of collateral property while the former are exempted from the BSP capital reserve requirement for HGC guaranteed loans. It also freed-up banks from administrative burden if a loan evades.

The expansion of HGC guaranty programs to the countryside is an ongoing initiative that started in 2011. Orientations and briefings about the HGC guaranty were conducted to rural banks in different parts of the country. By the end of 2012, HGC was able to reach 237 rural banks form 15 provincial federations in 9 regions, namely: National Capital Region, Regions I-IVA, Region V, Regions VII-VIII and Region XIII.

From this extensive marketing campaign, rural bank clients increased from two in 2011 in 12 in 2012 and 18 in 2013. Seven of these rural banks are actively enrolling, while the rest are in the process of consolidating their accounts for enrollment.
Recently, HGC and the Rural Bankers Association of the Philippines (RBAP) had a Partnership Ceremony held last September 26 at the Coconut Palace in Roxas Boulevard, Manila. Certificate of Partnerships were awarded to 17 partner rural banks, which include: 1st Macro Bank, AMA Rural Bank, Banco Alabang, Bank of Makati, Cantilan Bank, Inc., Lipa Rural Bank, Inc., Mount Carmel Rural Bank, Inc., Rang-ay Bank, Rural Bank of Cauayan, Rural Bank of Guinobatan, Rural Bank of Mabitac (Laguna), Inc., Rural Bank of Pagbilao, Rural bank of Porac (Pampanga), Inc., Rural Bank of Rosario (La Union), Rural Bank of San Jose (Camarines Sur), Inc., Rural Bank of Tanza (Cavite), Inc., and Zambales Rural Bank.

From hence, rural banks may grant a housing loan system with a more adequate and appropriate risk management measure in which, people among rural communities can conveniently access without taking financial risk on their part.
_______________________________________________________________________________________
BIR Reply Re: Printing Costs of Unused Existing Official Receipts to be Expensed in Monthly Installments 
Posted: 06 Oct 2013 06:47 PM PDT
August 15, 2013

MR. VITTORIO Z. ALMARIO
President
Rural Bankers Association of the Philippines
Intramuros, Manila

Dear Mr. Almario:
This refers to your letter dated July 23, 2013 as endorsed by Hon. Cesar Purisima and received by our office on August 13, 2013 regarding your request that the cost of all unused existing official receipts duly printed in accordance with BIR regulations and secured with proper Authority To Print be expensed in monthly installments commensurate to the monthly usage of the new official receipts.

If the printing cost of these unused official receipts were already taken up as expense in your previous financial statements, granting your request will result to double claim of deductions. However, if these costs were taken up initially as part of current assets, then your request is taken favorably.

Please be informed of RMC No. 54-2013 whereby all Principal and Supplementary Receipts/Invoices with ATP dated January 1, 2011 to January 17, 2013 may be used until October 31, 2013 provided that new ATP was issued on or before August 30, 2013. However, application for new ATP filed after April 30, 2013 is deemed to have been filed out of time and subject to a penalty of One Thousand Pesos (P1,000) pursuant to Section 264 of the Tax Code, as amended.

For your information.
Very truly yours,
(Sgd) NELSON M. ASPE
Deputy Commissioner
To download a copy of this letter, please click on this link: BIR Reply Re: Official Receipts
_______________________________________________________________________________________
ANNOUNCEMENT: Nomination for MVP Bossing Awards
Posted: 06 Oct 2013 07:01 PM PDT

Dear Rural Bankers,

The PLDT SME-Nation, in partnership with Go Negosyo, once again seeks to recognize the country’s leading entrepreneurs in this year’s search for the new Champions of Filipino Values in Business.

They are looking for fine Filipinos who continuously work hard by tapping skill, talent and technology in order to succeed in their respective business ventures. The contest is open to owners of Small and Medium Enterprises and homegrown Filipino businesses that have been in operation for at least 5 years.

If your “Bossing” is an inspiration to others, if his/her business exemplifies exceptional creativity and perseverance, then make his/her story part of SME history. Nominate him/her by filling out the nomination form, which can be downloaded here: MVP Bossing Awards Nomination form

Together with the nomination form, kindly attached the following documents:
1. DTI Business Permit/SEC Registration (photocopy of the cover page only)
2. Proof of current PLDT Business Subscription (ex. billing statement for one month of one account)
3. Essay answering the questions above.

Kindly submit completed application forms thru email at mvpbossingawards@pldt.com.ph, at Go Negosyo offices or PLDT SME Nation Offices. You may likewise submit the nomination forms thru your PLDT SME Nation Account Officers.
Thank you.
_______________________________________________________________________________________
Special Learning Session with the Calabarzon Governors‏
 
  Download Membership Form
_______________________________________________________________________________________
Philippines Achieves Investment Grade Credit Rating with Positive Outlook from Moody’s

Manila, 3 October 2013 – The Philippines today achieved an investment grade rating from international credit rating agency Moody’s Investor Service. In a statement released by the agency, the sovereign rating of the Government of the Philippines was upgraded from ‘Ba1’ to ‘Baa3’ with a positive outlook. This upgrade by Moody’s follows the Philippine sovereign’s investment grade rating from Fitch in March and from Standard and Poor’s (S&P) in May. Both Fitch and S&P assign a stable outlook to the Philippines’ investment grade rating.

Receiving news of the announcement, Governor Amando M. Tetangco, Jr. of the Bangko Sentral ng Pilipinas (BSP) thanks the credit rating agency for the upgrade. “The BSP is pleased that Moody's has recognized the country's strong prospects and potentials as evident in the investment grade rating and positive outlook that it assigned to the Philippines. This is an affirmation of the steady and responsible macroeconomic stewardship and purposeful structural reform agenda of the Philippines.”

The Governor continues, “Clearly, Moody's has acknowledged the strong upside potentials and the constructive dynamics of the economy that should enable it to ride out the volatilities in global financial markets.”
He adds “This development should bode well for more investments, both local and foreign, in the country. Greater investments should strengthen the base for sustained and inclusive economic growth and usher in a transformative period for the Philippine economy.”

Reiterating the commitment to focus on macroeconomic stability, the Governor concludes, “The BSP shall continue to be attentive to challenges and risks in the operating environment. We will continue to ensure that the economy's resilience and flexibility are safeguarded through prudent monetary and financial policies.”
In its rationale, Moody’s cited the following key drivers for the upgrade: robust economic performance; ongoing fiscal and debt consolidation; and political stability and improved governance. In addition to the 7.6% GDP expansion in the first half of 2013, Moody’s highlighted the stability of the Philippines' funding conditions in the face of recent market volatility in emerging markets as evidence of the country’s resilience to external factors.
Also cited were the low and stable inflation levels as well as the liquidity of the banking system—the only system worldwide deemed by Moody's to have a positive outlook. The credit agency also highlighted the Aquino Administration’s popularity and success in institutionalizing its reform agenda. The positive outlook comes off the back of expectations of continued economic outperformance of the Philippines as compared to its peers in the region as well its continued prospects for reform in the second half of President Aquino’s term in office.

The Philippine Government acknowledges the support of its credit ratings advisors from Goldman Sachs’ Credit Risk Management and Advisory Group, in particular Jacob Young (Executive Director), Francisco Mejia (Executive Director), and Aaron Collett (Analyst).
_______________________________________________________________________________________
Nine rural banks awarded as ‘outstanding partner CFI’ of LBP
Posted: 01 Oct 2013 06:49 PM PDT

The Rural Bankers Association of the Philippines (RBAP) congratulates the nine rural banks recently awarded by the Land Bank of the Philippines (LBP) as an ‘outstanding partner countryside financial institution (CFIs).’
On its 15th year, the LBP recognize CFIs serving as models of excellence in rural financial services and in promoting inclusive growth to improve the economy.

Receiving the award are the following rural banks:

One Network Bank
Golden Award
1. One Network Bank, Inc (Davao City) – Hall of Fame Golden Award and cash prize of P500T.

Rural Bank of Goa, Inc.
National Award, 1st Place
Best CFI Availer-Microfinance Loan
2. Rural Bank of Goa, Inc. (Camarines Sur) – Most Outstanding CFI in National Category and a cash prize of P300T

Gateway Rural Bank, Inc.
National Award, 2nd Place
Best CFI Availer-All Loans
3. Gateway Rural Bank, Inc. (Bulacan) – Second Place and a cash prize of P200T

Rural Bank of San Jose, Inc.
National Award, 3rd Place
4. Rural Bank of San Jose, Inc. (Camarines Sur) – Third Place and a cash prize of P150T

Cantilan Bank (A Rural Bank), Inc..
National Winner, 5th Place

Rural Bank of Cauayan, Inc.
National Winner, 4th Place
Best CFI Availer, Agri-Agra Loans
5. Rural Bank of Cauayan, Inc. (Isabela) and Cantilan Rural Bank (Surigao del Sur)
- Landed in fourth and fifth place with P100T and P75T cash prize, respectively.

The LBP also gave citations and a cash prize of P75T to the most outstanding rural banks in three political regions: Rang-ay Bank, Inc. (A Rural Bank) from Region 1; Bangko Kabayan (A Rural Bank), Inc. from Region 4-A; and, Rural Bank of Digos, Inc. from Region 11.

Special awards and cash prizes of P100T each were also given to the following CFls: Rang-ay Bank, Inc. as Best CFI Intermediary (with lowest pass-on rate to end borrowers); Rural Bank of Cauayan, Inc. as Best CFI Availer – Agri/Agra Loans; Rural Bank of Goa, Inc. as Best CFI Availer – Microfinance Loans and Gateway Rural Bank, Inc. as Best CFI Availer – All Loans.
_______________________________________________________________________________________
ANNOUNCEMENT: RBAP 56th Annual Symposium
Posted: 27 Sep 2013 12:57 AM PDT

WHAT: 56TH ANNUAL SYMPOSIUM
WHEN: November 11-12, 2013 (Monday & Tuesday)
WHERE: Polkabal – Rigodon Hall, Manila Hotel.

For the meantime, rural bankers who are willing to advertise in any of the souvenir material for the upcoming symposium are advised to contact Ms. Shalie Y. Recaido, Administrative Officer for particulars at (02) 527-2972 or (02) 527-2968 or through email at: recaidoshalie@yahoo.com.

The RBAP Secretariat will provide updates here as soon as any additional information becomes available.

Thank you for bearing with us.
_______________________________________________________________________________________
MVSM Bank Celebrates 60th Anniversary
Posted: 27 Sep 2013 12:17 AM PDT

MVSM Bank celebrated its 60th anniversary last July 24, 2013 at the iconic Capitan Moys in Marikina City. Gracing this event is Marikina Vice Mayor Fabian Cadiz.

MVSM is a merger between Marikina Valley Rural Bank and Bank of San Mateo. Both banks are pioneer banks in their respective towns and were the only banks to service the banking needs of the people of Marikina and San Mateo, Rizal for decades.

Today, its client base has grown to over 25,000, delivering deposit and loan products to the different towns in Rizal, Pasig and Marikina. The bank is also an accredited agent for both Bayad Center and Western Union.

MVSM has recently partnered with Habitat for Humanity in providing deposit products for the people in Marikina.
Check out their website at www.mvsmbank.com
_______________________________________________________________________________________
RBAP HAILS ONB, RB OF SAGAY FOR 2013 SSS BALIKAT NG BAYAN AWARD Posted: 26 Sep 2013 11:48 PM PDT

The Rural Bankers Association of the Philippines (RBAP) congratulates One Network Bank, Inc. and the Rural Bank of Sagay for bagging the Social Security System’s (SSS) Balikat ng Bayan Award last September 9.

The award was given in celebration of the SSS’ 56th Anniversary and in recognition of the invaluable role of employers, banks and the media as SSS partners in advancing security protection of Filipino workers. The awardees set the standards of quality service for the benefit of millions of SSS members.

This year, both the One Network Bank, Inc. and the Rural Bank of Sagay were awarded Best Rural Banks by the SSS.
Apart from One Network Bank, Inc. and the Rural bank of Sagay, ten (10) other awardees are: iRemit, Inc (Best Collecting Partner for OFW Remittances from 2010-2012), Jollibee Food Corporation and the Notre Dame of Cotabato, Inc. (Top employers in the large and small/medium Categories), Banco De Oro Unibank (Best Commercial Bank), Planters Development Bank (Best Thrift Bank), Ventaja International Corporation (2013 Best Collecting Partner), the Land Bank of the Philippines, First Consolidated Bank, the Manila Bulletin and Aksyon Solusyon of Radyo Singko.

The Balikat ng Bayan plaques were specially made by Filipino sculptor Dr. Antonino Raymundo and presented to the winners by SSS President and Chief Executive Officer Emilio de Quiros, Jr., Chairman Juan Santos and Executive Vice President Edgar Solilapsi.umanity in providing deposit products for the people in Marikina.
Check out their website at www.mvsmbank.com
_______________________________________________________________________________________
Rural Bank of Mangaldan: 50 Years of Genuine Commitment and Excellent Service
Posted: 26 Sep 2013 08:39 PM PDT

Unknown to many, the town name “Mangaldan” has different stories of origin. However, according to a Dominican Priest Fr. Raymundo Suarez, OP, in his manuscript, “Apuntes Cureosos de Pangasinan,” the word “Mangaldan” was derived from the root word “Alar” or “Alad,” which means a fence made of bamboo or of any similar material. Despite the presence of bamboo fences all over the town, Mangaldan’s primary economic resources include farming, livestock, poultry and fish. Its inhabitants, approximately 92,000, were known to be peace loving, intelligent and generous people.

It is in this first-class soil did the Rural Bank of Mangaldan laid its foundation. It was through the initiative of Drs. Ricardo C. Villamil and Vicente Jimenez that this bank was born. Reluctant to pursue banking due to lack of experience and background, Dr. Jimenez was later on convinced by Dr. Villamil to start to what will later become an outstanding financial institution of Mangaldan and nearby towns.

Rural Bank of Mangaldan prioritize their clients by offering a variety of deposit and lending services to meet the demands of the community. Among which are savings, time certificate of deposits and demand deposits. For lending, they offer agricultural loans, agrarian reform loans, commercial loans, industrial loans, short, medium and long-term loans, micro finance loans and money shop loans.

Apart from delivering the usual banking services, the Rural Bank of Mangaldan has never neglected its corporate social responsibility. Believing that education is the key to escape from the clutches of poverty, the bank sends poor but deserving students to pursue their studies. The bank also has programs geared towards environmental protection by engaging students from Talogtog Elementary School and Gueguesangen Elementary School in tree-planting activities.
Due to its outstanding contribution in the development of the countryside by being responsive to the needs of the rural community, Rural Bank of Mangaldan received numerous awards during the years 1970 to 1987.

Among which are as follows:

Golden Plaque Award as “Rural Bank of the Year 1976.” Which was presented to Dr. Jimenez by then box office movie queen Alma Moreno, assisted by Modesto Francisco, special assistant to the Central Bank Governor, and Manuel Santos of the CB-DRBSLA, and witnessed by then Secretary Arturo Tangco of the Department of Agriculture;
Achievement Award as “Most Outstanding Rural Bank of the Country for 1976-1977,” from the Central Bank of the Philippines;

“Rural Bank of the Year 1976-77, from the Samahang Bangko Rural ng Pangasinan”

“One of the Ten Best Managed Rural Banks in Region I in 1983,” from the Central Bank of the Philippines;
Rural Bank of Mangaldan prides itself as the No. 1 single taxpayer in Mangaldan and for taxable year 2001, the No. 1 taxpayer in Pangasinan.

Since stability came hand-in-hand with the quality of leadership, Dr. Vicente Jimenez has turned over the stewardship of the bank to his son, Mr. Alberto Jimenez, who is presently serving as the Chairman of the Board, President and General Manager. Like his father and predecessor, the latter is equally competent in continuing the legacy of the founder. He had been the President of the Samahang Banko Rural ng Pangasinan Foundation, Inc. in 2001-2003 and President of the Confederation of Northern Luzon Rural Banks in 2002-2003.

As the bank celebrates its golden anniversary of service, advocacy and quality, clients can rely on the touchstones the bank have since its humble beginning to prove that rural banking remains the finest partner in the countryside in times of need. The bank holds itself as a fine example of stewardship, which can be attested by its 50 years of uplifting the lives of the people of Mangaldan.

Over the years of brilliance in the industry, the Rural Bank of Mangaldan now known as the Bangko Rural ng Mangaldan was able to set a standard in the industry not only in the town but also in nearby areas and will continue to do so in the years ahead as led by its new management.
_______________________________________________________________________________________
Landbank cites outstanding rural banks
Posted: 23 Sep 2013 11:50 PM PDT

MANILA, Philippines – For the 15th consecutive year, the Land Bank of the Philippines (LBP) once more paid tribute to its outstanding partner countryside financial institutions (CFIs).

LBP president and chief executive officer Gilda E. Pico said CFIs have unique strengths and potentials that allow them to truly play a distinct role in countryside development.

“This bounty of possibilities has inspired us over the years to continuously expand support to this sector,” Pico said, adding that the conferment of awards brought with it total cash prizes of P1.95 million.

Conferred with the Golden Award was the One Network Bank Inc. (A Rural Bank) in Davao City, which received a trophy and cash prize of P500,000. The Golden Award is given to a former Hall of Fame awardee which continued to support small farmers and fisherfolk as evidenced by their increasing number of small farmers and fisherfolk assisted and loan portfolio to the sector.

The Rural Bank of Goa Inc. from Camarines Sur was named the most outstanding CFI in the national category, followed by the Gateway Rural Bank Inc. in Bulacan.

The Rural Bank of San Jose Inc. in Camarines Sur bagged the third place while the Rural Bank of Cauayan Inc. in Cauayan City and the Cantilan Bank (A Rural Bank) Inc. in Surigao del Sur landed in fourth and fifth places, respectively.

The first, second and third place winners in the national level received P300,000, P200,000, and P150,000, respectively while the fourth and fifth place winners received P100,000 and P75,000, respectively.

Citations were likewise given including cash prize of P75,000 each to the most outstanding rural banks in three regions: Region 1 – Rang-ay Bank Inc. (A Rural Bank); Region 4-A – Bangko Kabayan (A Rural Bank) Inc.; and, Region 11 – Rural Bank of Digos Inc.

Special awards were also given to the Rang-ay Bank as Best CFI Intermediary (with lowest pass-on rate to end borrowers); Rural Bank of Cauayan Inc. of Isabela as Best CFI Availer – Agri/Agra Loans; Rural Bank of Goa as Best CFI Availer – Microfinance Loans; and Gateway Rural Bank as Best CFI Availer – All Loans.

In the first semester of 2013, LBP extended P9.8 billion in loans to CFIs, benefiting 165,478 farmers and fisherfolk nationwide.

Source: http://www.philstar.com/banking/2013/09/24/1237328/landbank-cites-outstanding-rural-banks
_______________________________________________________________________________________
China Bank buying 67% stake in Plantersbank
Move seen to boost lending to SMEs
By Paolo G. Montecillo
Philippine Daily Inquirer
3:41 am | Thursday, September 19th, 2013


Henry Sy-led China Banking Corp. (China Bank) aims to strengthen its small- and medium-enterprise (SME) lending business with its acquisition of Planters Development Bank, which was approved Wednesday.

In a disclosure to the local bourse, China Bank said it was planning to take over the smaller bank by acquiring as much as two-thirds of its shares.

The deal combines the resources of Plantersbank, the country’s leading bank for SMEs, with China Bank, a 93-year old universal bank with a “history of supporting entrepreneurs in the country and a solid track record of financial strength and stability,” China Bank said in a statement.

Shares of China Bank were up by 4.35 percent on Wednesday following the announcement. The company’s stock outperformed the main index, which closed 0.16 percent lower.

The Sy group also controls BDO Unibank, the country’s biggest lender.

“The Plantersbank deal bolsters China Bank’s current strategy in two areas—growing its middle market/SME portfolio and its network expansion program. China Bank is in the midst of the most rapid expansion in its history,” the Sy-led bank said.
From 148 branches in 2006 at the start of its expansion program, it has a total network of 333 branches to date, complemented by 544 ATMs nationwide. The group will now have a combined network of at least 411 branches.

As of June 2013, China Bank had total assets of P345.6 billion, gross loans of P189.9 billion, and stockholders’ equity of P44.6 billion.

For the first semester of 2013, the bank posted a 46-percent growth in consolidated profit to P2.96 billion from P2.03 billion in the same period last year, for a return on average equity of 13.24 percent and a return on assets of 1.81 percent.
The China Bank Group includes China Bank, China Bank Savings (CBS), Unity Bank, CBC Insurance Brokers Inc., and Bancassurance affiliate Manulife China Bank Life Assurance Corp. (MCBLife).

The Investment & Capital Corp. of the Philippines (ICCP) acted as the exclusive financial adviser to Plantersbank for the transaction.

Plantersbank, chaired by former Ambassador Jesus Tambunting, has total assets of more than P52.7 billion as of May 2013, total loan portfolio of P33 billion, deposits of P43.6 billion and nationwide network of 78 branches.
_______________________________________________________________________________________
In safe hands
Posted: 18 Sep 2013 06:44 PM PDT

Recently, the Bangko Sentral ng Pilipinas reported that the personal remittances from Overseas Filipino Workers (OFWs) grew from 6.4 percent to $13.9 billion for the first half of 2013, compared to the same period a year ago. The sustained growth was still largely driven by the land-based OFWs whose remittances comprised of about threefourths (75.2 percent) of the total.

With such money coming in, are there options available for our “modern day heroes” and their families here in our country to further grow their funds? For instance, having too much money can prove fatal especially if these are placed in the “wrong hands” or even placed in an investment asset where some might lack substantial knowledge on the risks associated to it. Thus, choosing the right investment destination for the remittance money is as equally important as keeping the overseas job itself.

Aside from the usual investments in real estate and in various business opportunities, the rural banking industry represents a safe and viable destination for the hard-earned money of OFWs.

Rural banks are in the best position to serve the financial needs of OFWs and their families as most of them reside in rural communities where rural banks operate. It is not uncommon for rural bank owners and staff to personally know these people: they typically come from same villages or barangays, and they almost shared their childhood together. No other financial institution can better provide a more personable service than grassroots companies like rural banks.

Rural banks likewise offer different financial and non-financial products and services to OFWs and their families. These include high-yield medium/long-term time deposit, children’s savings accounts, education and housing loans, bills payment and collection services for pension funds and government healthcare services, as well as advisories on how to start business ventures and undergo skills training in partnership with different government agencies. Most rural banks also provide counseling services to OFW spouses on how to best take care of their money. They become like a “financial coach” to families, providing helpful tips on how to become entrepreneurs and how to keep their businesses profitable.

Remittances saved likewise help provide employment opportunities since the law provides that rural banks should invest their earnings back to the rural communities where they operate. All these opportunities help improve the utilization and conversion of remittances into productive investments and ventures in the countryside, thus expanding the benefits derived from foreign remittances.

In 2012, OFWs remitted more than $21 billion, equivalent to 8.5 percent of the country’s gross domestic product last year. Such a powerful contributor to the economy deserves nothing less than the utmost care and the best treatment only rural banks can truly offer.
_______________________________________________________________________________________
BSP shutters rural bank in Davao del Norte      
ABS-CBNnews.com
Posted at 09/16/2013 7:02 PM | Updated as of 09/16/2013 7:02 PM

MANILA, Philippines - Another rural bank has been shuttered by the Bangko Sentral ng Pilipinas.

The Monetary Board has placed the Rural Bank of Sto. Tomas (Davao del Norte), Inc. under the receivership of the Philippine Deposit Insurance Corporation (PDIC) last September 13.

The PDIC took over the bank on Monday (September 16).

Rural Bank of Sto. Tomas has three units -- the head office located along R. Magsaysay Ave., Sto. Tomas, Davao del Norte, and two branches in Asuncion and Braulio Dujali.

As of June 30, 2013, the bank had 8,023 accounts with total deposit liabilities of P67.7 million. Around 99.9% of the deposit accounts have balances of P500,000 or less and fully covered by deposit insurance. Total insured deposits amounted to P58.2 million or 86.0% of the total deposits.

PDIC said assured the bank's depositors that all valid deposits shall be paid up to the maximum deposit insurance coverage of P500,000.

The PDIC will conduct a Depositors-Borrowers Forum on September 20, 2013 to inform depositors of the requirements and procedures for filing deposit insurance claims.

For more information, visit www.pdic.gov.ph. Concerned parties may also call the PDIC Toll Free Hotline at 1-800-1-888-PDIC(7342), the PDIC Public Assistance Hotlines at (02) 841-4630 to (02) 841-4631, or send their e-mail to pad@pdic.gov.ph.
_______________________________________________________________________________________
Cash-rich banks barely needed BSP’s rediscounting window      
Published on Tuesday, 10 September 2013 19:26
Written by Bianca Cuaresma

LOCAL banks posted a decline in their availment of the Bangko Sentral ng Pilipinas’s (BSP) peso-rediscount window, an indication of ample liquidity supply among banks, latest data from the central bank show.

The BSP reported total loan availment of commercial, thrift and rural banks amounting to P16.41 billion in the first eight months. This was 44.1 percent lower than the P29.35 billion seen in the same period last year.

The central bank’s peso-rediscounting window allows qualified banks to get loans or advances from the BSP using eligible papers of its borrowers as collateral. Through this facility, the central bank advances the money the banks have yet to collect from borrowers and effectively speeds up the lending process.

According to BSP data, 81.7 percent of the total amount rediscounted went to commercial credits, 7.7 percent to capital expenditures, 3 percent to agricultural and industrial credits, 0.6 percent to permanent working capital, 0.1 percent to housing and 6.9 percent to other credits.

Meanwhile, dollar-denominated rediscounting from January to August this year under the Exporters Dollar and Yen Rediscount Facility also decreased by 28.6 percent.

Seven commercial banks and a thrift bank exchanged their foreign currency receivables for quick cash from the BSP worth $87.9 million as of end-August this year, benefiting 30 exporters. This was lower compared to the $123.1 million granted in the same period last year. No bank approached the Yen rediscounting window since the start of the year, however.

For September, rates stood at 0.182 percent for dollar rediscounting and about 0.116 percent for the Japanese yen. The rates are based on the London Interbank Offered Rate as of end-August this year.

For the peso-rediscounting facility, interest rates remained at 3.5 percent for all maturities. This had been in place since October last year. The BSP’s Monetary Board (MB) also decided to maintain the same rate during its rate-setting meeting in July. The MB will hold its next policy meeting this Thursday.
_______________________________________________________________________________________
Advanced Course on Property Appraisal – Oct 18-19, 2013      
Posted: 08 Sep 2013 08:21 PM PDT

Advanced Course on Property Appraisal
Date: Oct 18-19, 2013 (Friday-Saturday)
Venue: RBAP, Intramuros, Manila
Time: 8:30am to 5:30pm
Resource Person: Engr. Ferdinand Bocobo
Senior Property Manager, BDO

Seminar Fee:
1. Early bird – P4,200 (on or before Sept 27, 2013)
2. Regular Rate – P4,600 (after Sept 27, 2013)
3. Non-Member/Delinquent – P5,520

Mode of Payment
• A Non-Refundable commitment fee of P2,300.00 per participant.
• Bank account (LBP – Intramuros Branch Savings Account Number 0012-1046-26).
• Proof of payment fax to (02) 527-2980.
• Check payments, should be payable to (RBRDFI).

Training Policies:
1. Reserve first with RBAP-RBRDFI your training slot, and wait for RBAP-RBRDFI confirmation of your reservation. Thereafter, you may deposit the Registration Fees, book ticket (airline) and secure accommodations. RBAP-RBRDFI will not be responsible for any damage caused by unconfirmed reservation (s).

Likewise, once training is FULL, RBAP-RBRDFI has the right to refuse participation or reimbursement on any damage brought by unconfirmed reservations.

Deadline for submission of registration is not later that Oct 11, 2013.

2. Reservation via telephone conversation is accepted. However, Registration Form and fee must be settled 10 days prior the seminar date or Oct 07, 2013. Otherwise, reservation is considered cancelled.

3. Cancellation Policy: – This will apply to non-subsidized training fee.
a) 10 days prior the seminar date is entitled for a full refund. *Regular Rate only
b) 3 days prior to the seminar date is entitled for a half refund *Regular Rate only
c) Participants who have paid but failed to show up for the seminar will only be entitled to a rebate of 50% of the total registration fee. (Regular Rate only)
d) For special cases (health, accident etc.), kindly coordinate with RBRDFI staff for refund procedures and requirements.

Seminar Methodologies
Lectures & Actual Computations
Expected Participants
Appraisers,

Course Outline
PART I: Salient Features of Republic Act 9646
A. Continuing Education Requirements under D.A.O. No. 3 Series of 1999
B. Salient Features if the I.R.R. Of the RESA 9646
C. Overview of the Philippine Valuation Standards (PVS)

PART II: Review of the Sales Comparison and Cost Approach
A. Other Primary Methods of Valuation
a. Valuation by Allocation
b. Valuation by Extraction / Abstraction
c. Valuation by Inferential and Rectification
d. Stripping Method of Valuation
e. Valuation by Plottage and Assemblage
f. Valuation by Averaging
g. Ground Rent Capitalization
h. Valuation by Discounted Cash Flow
B. Income Approach
a. Land Residual Technique
b. Building Residual Technique
c. Property Residual Technique
C. Hypothetical Subdivision Development Technique

PART III: Sample Problems

Download the Confirmation Sheet in PDF
_______________________________________________________________________________________
Credit Investigation Seminar – October 17, 2003      
Posted: 04 Sep 2013 07:49 PM PDT

Date: Oct. 17, 2013 (Thursday)
Venue: RBAP, Intramuros, Manila
Time: 8:30am to 5:30pm
Resource Person: Engr. Elmer R. Rivera
FVP, Head CI & Appraiser, Metro Bank,
Trainer/Consultant

Seminar Fee:

1. Early bird – P2,400 (on or before Sept 27, 2013)
2. Regular Rate – P2,800 (after Sept 27, 2013)
3. Non-Member/Delinquent – P3,360

Mode of Payment

A Non-Refundable commitment fee of P1,400.00 per participant.
Bank account (LBP – Intramuros Branch Savings Account Number 0012-1046-26).
Proof of payment fax to (02) 527-2980.
Check payments, should be payable to (RBRDFI).

Training Policies:

1. Reserve first with RBAP-RBRDFI your training slot, and wait for RBAP-RBRDFI confirmation of your reservation. Thereafter, you may deposit the Registration Fees, book ticket (airline) and secure accommodations.

RBAP-RBRDFI will not be responsible for any damage caused by unconfirmed reservation (s).

Likewise, once training is FULL, RBAP-RBRDFI has the right to refuse participation or reimbursement on any damage brought by unconfirmed reservations.

Deadline for submission of registration is not later that Oct. 11, 2013.

2. Reservation via telephone conversation is accepted. However, Registration Form and fee must be settled 10 days prior the seminar date or Oct 07, 2013. Otherwise, reservation is considered cancelled.

3. Cancellation Policy: - This will apply to non-subsidized training fee.
a) 10 days prior the seminar date is entitled for a full refund. *Regular Rate only

b) 3 days prior to the seminar date is entitled for a half refund * Regular Rate only

c) Participants who have paid but failed to show up for the seminar will only be entitled to a rebate of 50% of the total registration fee. (Regular Rate only)

d) For special cases (health, accident etc.), kindly coordinate with RBRDFI staff for refund procedures and requirements.

Seminar Methodologies

Lectures & Case presentations
Expected Participants
Appraisers, CIs, Credit & Loan Officers

Course Outline

Introduction to Credit
Definition of Credit
The Credit Process
Importance of Credit
Types of Credit
The 5 C’s of Credit and definition of each
The Credit Evaluation and Analysis
The Credit Evaluator
Credit Investigation as Defined
The Credit Investigator
Objectives of Credit Investigation
Sources Of Credit Information
Ways of Gathering Credit Information
Different Types of Credit Investigation
Credit Investigation on Individual
Credit Investigation on Business / Corporation
Negative Checking (CMAP / NFIS)
Bank Checking (BAP member Banks and non-BAP member banks)
Field Checking
Different Types of Field Checking
Address / Business Verification
Employment Verification
SEC/DTI Verification
Trade Checking
Court Case Verification
Credit Card Verification
LTO Verification
Property Search

Download CIR
_______________________________________________________________________________________
Advanced Course on Property Appraisal – Oct 18-19     
Posted: 04 Sep 2013 07:53 PM PDT
Date: Oct 18-19, 2013 (Friday-Saturday)

Venue: RBAP, Intramuros, Manila
Time: 8:30am to 5:30pm
Resource Person: Engr. Ferdinand Bocobo
Senior Property Manager, BDO
Seminar Fee:
1. Early bird – P4,200 (on or before Sept 27, 2013)
2. Regular Rate – P4,600 (after Sept 27, 2013)
3. Non-Member/Delinquent – P5,520
Mode of Payment
• A Non-Refundable commitment fee of P2,300.00 per participant.
• Bank account (LBP – Intramuros Branch Savings Account Number 0012-1046-26).
• Proof of payment fax to (02) 527-2980.
• Check payments, should be payable to (RBRDFI).

Training Policies:
1. Reserve first with RBAP-RBRDFI your training slot, and wait for RBAP-RBRDFI confirmation of your reservation. Thereafter, you may deposit the Registration Fees, book ticket (airline) and secure accommodations. RBAP-RBRDFI will not be responsible for any damage caused by unconfirmed reservation (s).

Likewise, once training is FULL, RBAP-RBRDFI has the right to refuse participation or reimbursement on any damage brought by unconfirmed reservations. Deadline for submission of registration is not later that Oct 11, 2013.

2. Reservation via telephone conversation is accepted. However, Registration Form and fee must be settled 10 days prior the seminar date or Oct 07, 2013. Otherwise, reservation is considered cancelled.

3. Cancellation Policy: – This will apply to non-subsidized training fee.
a) 10 days prior the seminar date is entitled for a full refund. *Regular Rate only
b) 3 days prior to the seminar date is entitled for a half refund * Regular Rate only
c) Participants who have paid but failed to show up for the seminar will only be entitled to a rebate of 50% of the total registration fee. (Regular Rate only)
d) For special cases (health, accident etc.), kindly coordinate with RBRDFI staff for refund procedures and requirements.

Seminar Methodologies
Lectures & Actual Computations
Expected Participants
Appraisers,

Course Outline

PART I: Salient Features of Republic Act 9646
A. Continuing Education Requirements under D.A.O. No. 3 Series of 1999
B. Salient Features if the I.R.R. Of the RESA 9646
C. Overview of the Philippine Valuation Standards (PVS)

PART II: Review of the Sales Comparison and Cost Approach
A. Other Primary Methods of Valuation
a. Valuation by Allocation
b. Valuation by Extraction / Abstraction
c. Valuation by Inferential and Rectification
d. Stripping Method of Valuation
e. Valuation by Plottage and Assemblage
f. Valuation by Averaging
g. Ground Rent Capitalization
h. Valuation by Discounted Cash Flow
B. Income Approach
a. Land Residual Technique
b. Building Residual Technique
c. Property Residual Technique
C. Hypothetical Subdivision Development Technique

PART III: Sample Problems

Download CIR
_______________________________________________________________________________________
BSP Circular No. 806-2013: The Establishment of Two Rediscounting Windows    

Dear RBAP Members:
Below is Bangko Sentral ng Pilipinas (BSP) Circular No. 806 Series of 2013: The Establishment of Two Separate Rediscounting Windows.

The Circular Letter is posted in the BSP Website.
View/Download BSP Circular 806-2013

Thank you.
_______________________________________________________________________________________
Banks must brace for new BSP regulations   
Published on Monday, 02 September 2013 19:49
Written by Genivi Factao

The Bangko Sentral ng Pilipinas (BSP) is fully prepared to implement the fortified guidelines contained under the Basel Core Principles (BCP) whose tenets were raised from 25 to 29 BCPs.

This was learned from BSP Officer in Charge and Director Lyn Javier who said the central bank continues to endeavor to comply with the terms of Basel 3 for more effective banking supervision to better insulate the financial system from overseas-borne and domestic reverses.

Javier said the BCPs are essentially best regulatory practice standards to which the local regulator aspires as part of its supervisory strategy and risk management goals.

BCP is comprised of essential criteria and additional criteria, which are the best practice standards.

Principles 1 to 13 cover power, responsibilities and functions of supervisors. “These are the must have of banking supervisor such as BSP,” Javier explained.

Principles 14 to 29 provides prudential regulations and requirements for banks.

“These are what the bank supervisors must require their banks to have,” she added. The common principles/standards for BCPs 14 to 29 include proportionality, concept of market development and stress testing.

Proportionality means there is no one-size-fits-all risk management system for banks. The application of guidelines mindful of the core principles vary from bank to bank depending on size, risk profile and complexity.

The BSP, Javier said, is adopting the proportionality principle in its risk- based supervision.

“We’re not requiring rural banks to adopt complicated and intricate systems as those of commercial banks. [Regulatory] expectation should be commensurate to the risk profile and business models of bank,” she said.

Market development, on the other hand, is being sensitive to the developments in the market.

She said it requires supervisors to compare one bank to another or to have peer analysis to find out the performance of one bank vis-à-vis another given the circumstances in the economy.

Stress testing is also an important part of risk management of bank’s forward-looking stress testing framework to be able to asses if they have enough capital to withstand the shock or stress scenarios that could happen according to Javier.
She took notice of Principle 16 and 24 on capital adequacy and liquidity.

“We have yet to adopt the liquidity framework of the Basel 3 framework, specifically the liquidity coverage ratio or the net stable funding ratio.

“It’s difficult to adopt this right away, considering from our current regulatory regime. We don’t have any liquidity threshold under existing regulations. We only issued circular 545 on the expectation on liquidity risk management,” she said.

BSP is conducting a continuing policy studies on the propriety of setting liquidity threshold for the domestic industry. Under the Basel 3 standards, you have the liquidity coverage ratio or the short term ratio to measure whether a bank could withstand a 30-day stress scenario, Javier said.

Currently, other countries are contesting the definition of the high quality level of liquid assets.
_______________________________________________________________________________________
MB approves implementing rules on foreign equity infusion in RBs   
Published on Monday, 02 September 2013 00:00
By A Web design Company

The Monetary Board (MB) has approved the implementing rules of Republic Act No. 10574 or “an Act Allowing the Infusion of Foreign Equity in the Capital of Rural Banks” which allows non-Filipino citizens to own up to 60 percent of the voting stock of a domestic rural bank (RB).

Consistent with the provisions of the law, the implementing rules contained in Bangko Sentral ng Pilipinas (BSP) Circular 809 are aimed at revitalizing the rural banking industry and improving the access to banking services in the country’s rural areas.

The implementing rules provide the general guidelines for the entry of foreign banks, non-bank corporations and individuals as shareholders of RBs.

The fitness of prospective investors in RBs will be assessed based on their strategic objectives, reputation and integrity and effectiveness of banking or business model.

Qualified foreign investors are allowed to pour capital into several RBs to the extent authorized by the MB.

Aside from foreign ownership of RBs, Circular 809 also sets the rules for the number of independent directors for RBs, the membership of elective or appointive official in the RB Board, the foreclosure of lands used as RB loan collateral, the valuation of government-held shares in RBs and the computation of dividend rates on RB shares held by government–owned or -controlled financial institutions.

The MB has issued the implementing rules for RA 10574 after series of consultations with the rural banking industry and key stakeholders.

The BSP is keen on strengthening the RB industry as part of its efforts to promote financial stability. RBs are also essential to enhancing financial inclusion by boosting access to financial services in the countryside. Financial stability and inclusion are supportive of sustained and balanced economic growth, which is a key objective of the BSP.
The new law amends RA 7353, otherwise known as the Rural Bank Act of 1992. It is also a consolidation of House Bill 5360 Senate Bill 3282.

Rural Bankers Association of the Philippines (RBAP) said the new law will help create an environment conducive to economic growth in the countryside.

“The passage of the Foreign Equity Bill into a law is a major win not only for rural banks, but to the countryside as well. Now that foreign investments are allowed, rural banks are now in a better financial position to reach out and serve both the unbanked and under-banked through improved banking services. We expect continuous development in the countryside especially now that rural banks are made even stronger and sustainable,” said Atty. Edward Leandro Garcia, former RBAP president, said.

Garcia said the measure would provide an additional source of capital for rural banks, placing them on a level playing field with thrift and commercial banks.

With the law in place, he said RBAP could now open its doors for talks on potential foreign investor partnership.

Nestor Espenilla, deputy governor of the Bangko Sentral ng Pilipinas (BSP) earlier said allowing foreigners to own in part rural banks will also mean improvements in their technological and operational capacity.

“Allowing foreign equity will give rural banks another option to increase capital. But more important than the money is the know-how,” Espenilla said.

Legislators, regulators and economists predict that foreign investors’ entry into the local rural banking industry will have a direct impact on countryside development, as it will spur economic activities in rural areas by creating an environment that is beneficial to foreign investors, local banking patrons, and national economy.

A healthier and more competitive rural banking sector, with the benefit of international partnerships, will mean more resources to reach out to the unbanked, underbanked, and the less privileged sector of society, according to Garcia.

“Our goal is to continue the role for which rural banks where established and that is to promote financial inclusion in the far flung areas of the Philippines,” Garcia said.

He stressed that foreign equity in rural banks will serve as a major stimulus for microfinance, micro-enterprise, and agriculture sectors, and all will serve as catalysts in countryside development.

The legislation will put rural banks in equal footing with all other banking categories, as it will open a new source of equity infusion, particularly for rural banks that are hard-pressed to expand and cannot afford sophisticated forms of financial services.
_______________________________________________________________________________________
Flood-hit banks get BSP relief   
By Paolo G. Montecillo
Philippine Daily Inquirer
7:16 pm | Sunday, September 1st, 2013

The Bangko Sentral ng Pilipinas (BSP) is granting regulatory relief to banks whose operations were affected by the recent flooding in Luzon.

This follows recent inclement weather brought by weather disturbances in the form of typhoon “Labuyo,” which affected parts of Northern Luzon, and the Southeast Monsoon made worse by tropical storm “Maring,” which led to flooding in Metro Manila and nearby provinces.

Under the list of relief measures approved by the BSP last week for thrift, rural, and cooperative banks are the exclusion of loans of borrowers in affected areas in the computation of soured loans, waiver of penalties for reserve deficiencies of branches in affected areas, and a moratorium on monthly payments to the BSP for banks undergoing rehabilitation.

Subject to the approval of the BSP, small banks would also be allowed to book probable losses from loans of borrowers in affected areas on a staggered basis over a maximum of five years.

The BSP said it would also waive penalties for delays in the submission of supervisory reports.
_______________________________________________________________________________________
BSP Circular No. 809: Amendment to Relevant Provisions of the Manual of Regulations for Banks Implementing RA 10574   
Posted: 28 Aug 2013 06:57 PM PDT

Dear RBAP Members:

Below is Bangko Sentral ng Pilipinas (BSP) Circular No. 809 Series of 2013: Amendment to Relevant Provisions of the Manual of Regulations for Banks Implementing RA 10574

The Circular is posted on their official website and can be accessed through: http://www.bsp.gov.ph/downloads/regulations/attachments/2013/c809.pdf

To download, please click: IRR – Foreign Equity Law

Thank you.
_______________________________________________________________________________________
Pres. Benigno Aquino’s Message for the Rural Banking Week   
Posted: 27 Aug 2013 01:35 AM PDT

MESSAGE
My warmest greetings to the Rural Banking Association of the Philippines as you observed the Rural Banking Week.

In the past three years of our administration, we have witnessed a steady rise in our country’s economic trajectory. Our newly instituted social and fiscal reforms – supported by unprecedented growth in GDP, upgrades from international credit rating agencies, and heightened investor and consumer confidence – have reestablished the Philippines as the next Asian tiger. All of these accomplishments are due in part to the valuable contribution of our rural banking industry. May you continue to be a driver of our economy, by creating more investment and livelihood opportunities for Filipinos in our rural areas, empowering them to play greater roles in revitalizing our nation.

The dynamic partnership of the public and private sectors advances their respective enterprises, and proves the Filipino people’s commitment to inclusive, equitable progress. Let us do our utmost to nourish our gains with the revived culture of integrity, transparency, and accountability, in pursuit of a brighter tomorrow for our country.

I wish you a successful gathering, and more power.

(Sgd). BENIGNO S. AQUINO III
Manila, August 2013
_______________________________________________________________________________________
REMINDER: October 7, 2013 – Deadline for Submission of 3Q Deposit Interest Rates
Posted: 26 Aug 2013 07:56 PM PDT
August 27, 2013


Dear Federation and Confederation Presidents and RBAP Members:

As part of our commitment with the Bangko Sentral ng Pilipinas (BSP), we would like to remind you of the submission of deposit interest rates for the Third Quarter of 2013.

The deadline for the submission of the Third Quarter Deposit Interest Rates is on October 7, 2013 (Monday). Kindly see attached file for the prescribed format.

To Federation and Confederation Presidents, kindly remind your members to submit their data on or before the set deadline of submission so their data will be included in the consolidated RBAP report that will be submitted to the BSP. Please email your deposit interest rates at info@rbap.org or michelle.rbap@gmail.com

We hope for everyone’s cooperation on the matter.

Thank you very much.
View/Download Template
_______________________________________________________________________________________
Emergency kit during calamity
Posted: 22 Aug 2013 02:30 AM PDT

Torrential rains brought about by Tropical Storm “Maring” recently pounded parts of Luzon including Metro Manila into submission, causing floods in a number of main thoroughfares.

Aside from floods and the resulting massive traffic jams, another usual sighting during these unfortunate times is families that found their homes submerged in flood waters being relocated to higher, dry grounds by barangay and municipal officials. Here in the Philippines, these high-ground and dry locations usually mean empty basketball courts and barangay halls that are converted to relocation sites. Meanwhile, the usual parties subject to relocation efforts when calamities occur are families in rural communities, aside of course from the informal settlers living in high-risk areas like close to creeks and rivers in the metropolis.

What we hope to see, and be assured of, in the future whenever heavy rains and floods hit the country again is rural families being financially secure even in the face of these calamities.

As these come with predictable regularity, it is important for the rural banks to continue to tailor their operations accordingly. This means, for example, to go easy on loans for newly-planted crops that will suffer from the onset of torrential rains. Since the ability to make accurate predictions is not perfect, or an off-season weather disturbance suddenly appears, some of the loan portfolios go sour.

When these threaten to adversely affect the banks, the Rural Bankers Association of the Philippines (RBAP) immediately applies for regulatory relief from the BSP. Such “relief” is temporary measures to help the banks survive the crisis while they and their clients are recovering.

Any increase in loan demand after a calamity depends on the extent of the resulting devastation. If it is so sweeping as to completely destroy entire livelihoods as Typhoon Pablo did in four of Davao Oriental’s municipalities, there is no loan increase to speak of. If, however, it is the cyclical disturbance, there may be increased demand as rebuilding begins.

For rural banks, however, it is important that some source of income is still available so that these borrowers can start paying their loans immediately, even if only for a fraction of the regular installment amount. Rural bank clients tend to have thinner financial cushions, which make it difficult to even pay such a fractional amount. This explains why rural banks in weather-challenged areas must plan very, very carefully at all times.

One of the ways to provide protection to poor individuals who have little savings is through the use of customized financial tool catering to low valued assets and compensation for illness, injury or death, which is made possible through microinsurance.

Fortunately, financial institutions like rural banks offer microinsurance products that cater specifically to the needs of the poor. Microinsurance is a very important tool to aid low-income households through insurance plans tailor-fit to their needs as it has limited amount of premiums, contributions, fees, and charges that do not exceed five percent of the current daily minimum wage and a ceiling on guaranteed benefits that do not exceed 500 times the current daily minimum wage.
Admittedly, utilization of insurance among Filipinos in general is still very low, what more among those in rural communities wherein they feel that they would rather spend money for food and other basic things than on insurance.

And thus, there’s the rub: people have yet to see insurance as a necessity, not until the time comes when they actually need it. That’s the thing about insurance. You hate, and dread, the moment that you will actually need it. That fear is multiplied a hundred fold when that time indeed does come—and you don’t have insurance.

Located generally in the same community as their target market, rural banks are in the best position to understand the specific needs of the rural communities compared to bigger financial entities. As such, they have been permitted to act as agents of microinsurance products through the Bangko Sentral ng Pilipinas (BSP) Circular 683, series of 2010. This authority allowed rural banks to serve as channel partners on microinsurance, facilitate client’s enrollment and collect premiums and claims administration.

On the other hand, the Rural Bankers Research and Development Foundation, Inc. (RBRDFI), the training arm of the Rural Bankers Association of the Philippines, assists rural banks in the enhancement of their microinsurance services by providing a step by-step guides and ready-to-use templates of documents required by the BSP and the Insurance Commission.

RBRDFI conducts basic training courses on microinsurance to qualify rural banks as microinsurance agents and brokers. They also promote insurance literacy among rural bank clients through training and educational tools and materials.
To date, RBRDFI has trained more than 200 rural banks and 450 bank officers and staff in basic microinsurance.

While lost lives (hopefully it does not come to that) cannot be replaced when the full force of Mother Nature takes its toll on us, lost properties can be, to a degree. More importantly, microinsurance provides that financial safety net and peace and mind, so much so that all poor families have to worry about when the next typhoon hits is their personal safety.
Nevermind their belongings. Microinsurance has that covered, and then some.
_______________________________________________________________________________________
BSP Circular No. 808: Guidelines on Information Technology Risk Management for All Banks and Other BSP Supervised Institutions  
Posted: 22 Aug 2013 12:11 AM PDT

Dear RBAP Members:
Below is Bangko Sentral ng Pilipinas (BSP) Circular No. 808 Series of 2013: Guidelines on Information Technology Risk Management for All Banks and Other BSP Supervised Insitutions
The Circular Letter is posted on their official website and can be accessed through:
http://www.bsp.gov.ph/downloads/regulations/attachments/2013/c808.pdf

Thank you.
_______________________________________________________________________________________
BSP approves rules allowing foreigners to take over weak rural banks  
By: Maricel E. Burgonio, InterAksyon.com
August 26, 2013 9:48 AM


MANILA – The Bangko Sentral ng Pilipinas (BSP) has approved the implementing rules and regulations (IRR) of the Rural Bank Act, which allows foreign ownership of lenders in the countryside.

BSP Deputy Governor Nestor A. Espenilla Jr. said the Monetary Board last Thursday approved the IRR. The law, which enables foreigners to own up to 60 percent of a rural bank, is aimed at recapitalizing these lenders.

"Under the RB Act, we had 90 days to finish the IRR. We completed that," Espenilla told InterAksyon.com. President Benigno Aquino III signed into law the Rural Bank Act of 1992 last May 29.

The BSP is set to release within the week the IRR, which would detail the criteria for foreign takeover, including congruence of strategic objective of the investors with the law, good reputation and financial capacity, Espenilla said.

Last year, the BSP shut down 24 banks, mostly rural lenders, after they were found to have had insufficient capital to support operations. The BSP and the Philippine Deposit Insurance Corp earlier put in place a scheme – the Strengthening Program for Rural Banks – whereby third parties can acquire troubled rural banks in exchange for tax and other incentives, such as exemption from restrictions on additional branches in overbanked areas.

Espenilla said the BSP expects multiple mergers involving small banks to happen towards the end of the year.

The Philippines has 600 rural banks, accounting for about two percent of the country's total banking resources of over P7 trillion.
_______________________________________________________________________________________
Rural banking leaner but healthier than ever  
11:20 pm | Sunday, August 18th, 2013


This letter is to correct the misconceptions that the Aug. 13 editorial “Rural banking woes” may have created among Inquirer readers.

The rural banking industry today may be leaner but healthier. The reach of its 2,500 branches across the country is wider and they provide financial services to a broader area.

Increasing competition from bigger banks, and even from other lending institutions that have encroached on the market of the rural banking industry, has affected the profitability of some rural banks. Also, because they are the most numerous among all bank types, rural banks will have the highest number of closures.

On the Strengthening Program for Rural Banks and SPRB Plus Program of the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp., the industry supports it. The industry recognizes the fact that mergers and consolidations will be crucial to the industry. There already have been mergers and buy-outs of rural banks by savings and commercial banks. More prospective buyers are now doing due diligence on many rural banks.

The increase in the non-performing loan (NPL) ratio of the industry from 2010 to 2012 was the result of typhoons and calamities: El Niño and 29 typhoons in 2010-2011, and Typhoon “Pablo” in 2012, which destroyed P34.4 billion worth of private infrastructure and agricultural property.

The 42-percent growth in total loan portfolio (TLP)—from P4.5 billion in 2011 to P110.70 billion in 2012—also contributed to the NPL increase. This means that with more money being lent, there would be a slight projected increase in the NPL.

There is also a social aspect distinct to rural banks when it comes to NPLs because we deal with people who live in our communities—our very own kababayan. Foreclosures on loan collaterals are generally avoided in favor of loan restructuring to aid the farmer or the small businessman. Aggressively foreclosing a property, though this will reduce the NPL, will force people to turn to loan sharks, resulting in more poverty for the community.

We recognize the challenges facing the industry and continue operating in line with the best banking practices and in conformity with the highest international Basel regulatory standards as imposed by the BSP, and improving our services as mandated by law. These include the services to the Agri-Agra sectors; the maintenance of the successful mobile phone banking platform; the introduction of microfinance and microinsurance products; and the continued evolution of the industry through technology and training.

Rest assured, based on the TLP, capitalization and other performance indicators, the rural banking industry is in a far better position today than it has ever been in the past.

—VITTORIO Z. ALMARIO, president, Rural Bankers Association of the Philippines
_______________________________________________________________________________________
True Measure  
Posted: 14 Aug 2013 07:28 PM PDT

They say that a person’s true character is tested by the way he performs in the face of adversity. When the pressure is at its highest, that is when one’s determination is truly measured.

The rural banking sector is facing a challenging time. In the midst of this, the sector still believes that the rough patch it is currently treading is just a temporary obstacle, a phase that any other business goes through. Be that as it may, this is high time for rural banks to show they are worthy of the trust of their clients—the under banked individuals who have otherwise no one to turn to.

Taking things into perspective, there are many reasons to remain optimistic. Foremost of which is the conducive regulatory environment that is expected to spur more activity within the sector. The measures undertaken by the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. (PDIC) have brighten the future of local rural banks, even if current circumstances have made the present somewhat of a concern.

The Strengthening Program for Rural Banks (SPRB) Plus, a joint undertaking of the BSP and the PDIC, for instance, is seen to improve the delivery of financial services in the countryside as it encourage mergers and consolidations (M&As) among rural banks, fostering a stronger rural banking system. Under this program, strategic third party investor (STPI) rural banks intending to acquire eligible rural banks through M&As can avail of financial assistance from the PDIC and regulatory relief from the BSP.

Eligible STPIs now include strong and well-managed thrift banks and commercial banks. As such, they are entitled to regulatory incentives and/or financial assistance when investing in eligible banks, especially those serving the countryside and under banked customers. Non-bank corporations may also qualify as white knights. On top of the financial assistance granted through PDIC, additional incentives may be offered by the BSP to broaden participation under the Program and promote successful banking partnerships.

To further attract investors, the BSP likewise gives additional premium for STPIs acquiring three or more eligible banks. STPI commercial and thrift banks shall be granted one additional branching license in restricted areas, while STPI rural banks shall be granted one additional branching license in areas outside Metro Manila for every three eligible banks resolved under the Program.

The Program is expected to not only sustain and strengthen the financial condition of resulting banks, but also to improve their quality of corporate governance and management.

In addition, the effects of Republic Act 10574, or “An Act Allowing the Infusion of Foreign Equity in the Capital of Rural Banks, Amending RA 7353, Otherwise Known as the Rural Bank Act of 1992 as amended and For Other Purposes,” will be soon felt as foreign investors are expected to troop in and infuse much-needed capital to some rural banks.

R.A. 10575 allows non-Filipino investors to own, acquire or purchase up to 60 percent of voting stocks in rural banks, provided that the percentage of foreign-owned stocks will be determined by the citizenship of the individual or corporate stockholders of the bank.

Not only will the new law provide banks with the proverbial rope to hang on to, but also it will further boost countryside development in the country through investment in rural banks. It will serve as a key instrument for the government to achieve its goal of full financial inclusion.

Things may seem daunting at this point, but the current available opportunities and future of the sector has never been brighter. Rural banks are essential to countryside development and they will remain so for many years to come.
_______________________________________________________________________________________
Rural banking woes  
August 12, 2013 at 8:33 pm

Last Aug. 1, the Bangko Sentral ng Pilipinas ordered the closure of another rural bank—the Rural Bank of San Jose del Monte in Bulacan—due to insolvency. Meaning, the bank’s assets had fallen short of its obligations to depositors. The bank was placed under the receivership of the state-run Philippine Deposit Insurance Corp. (PDIC), which is now processing 3,855 deposit accounts—or 98 percent of the bank’s total accounts—with balances of P500,000 or less and, therefore, are fully covered by deposit insurance. The total insured deposits amount to P334.1 million, or 91 percent of the bank’s total deposits. That is a lot of government money going down the drain.

The Rural Bank of San Jose is the 12th placed under PDIC’s receivership so far this year. In 2012, 23 rural banks were padlocked by the Bangko Sentral and PDIC spent nearly P4 billion on insurance claims against those financial institutions. Going further back, 25 rural banks were closed in 2011; 21 in 2010; and 31 in 2009, six more than the 25 failed banks in 2008. In all these closures, PDIC had to pay billions of pesos in insurance claims.

Let’s look at the problem from another angle: The non-performing loans (NPL) ratio of the rural banking sector rose to 10.65 percent in 2012 from 10.32 percent the previous year. In absolute amounts, this was equivalent to P12.22 billion worth of bad loans. In comparison, the much bigger universal and commercial banks improved their NPL ratio last year to a record-low of 1.87 percent.

There are more than 500 rural banks catering mainly to the needs of those in the provinces, who have no access to the bigger banks. Only a small portion of this banking segment appears to be the weakest link in the local financial sector, the Bangko Sentral says, noting that problematic rural banks are the exception rather than the rule. Nevertheless, the government—through PDIC—has had to spend billions of pesos when it had to assume the remaining assets of failed banks and shoulder the payment of all their liabilities.

Making things worse is that the closure of many rural banks was due mostly to capitalization and mismanagement problems, the Bangko Sentral said, though some were triggered by unsafe and unsound banking practices.

Because of the spate of closures in the rural banking sector, the Bangko Sentral and PDIC in 2010 moved to give incentives to healthy rural banks that will acquire their troubled peers. The scheme, called Strengthening Program for Rural Banks (SPRB), was expanded in September last year to include in the list of those eligible for incentives commercial and thrift banks. The new and expanded version, called the “SPRB Plus,” is in effect until December 2013.

But the families owning the rural banks seem not really sold to the move to include the commercial and thrift banks to the SPRB Plus program. And yet the program was formulated precisely due to a lack of takers from the rural banking industry.

Most of the strong rural banks were not interested in acquiring a weaker industry player, regulators had found out. This, even though the incentives being offered to potential “white knights” include loans to help cover capital shortfalls and improve operations, temporary regulatory relief on capitalization and branching requirements, condonation, restructuring and waiver of past-due rediscounting, and emergency loans. Other owners simply did not want new investors to come in.
Rural bank owners should listen to Bangko Sentral Governor Amando Tetangco. In his speech at the 60th annual convention of the Rural Bankers Association of the Philippines last June, he said: “Inclusive growth is possible only if countryside development is given the support it needs. Embedded and part of the communities where they operate, rural banks are in the best position to help spur rural development. Rural banks have a crucial role to play in national development as 40 percent of Filipinos live outside urban areas. I say this because our efforts to promote mergers and consolidation have yet to produce the results we look forward to. While we continue to receive applications for incentives under the [SPRB Plus], the reality is [that] less than 20 percent of available funding for capital buildup has been utilized.”

Tetangco is looking in the right direction: For rural banks to achieve their full potential, there must be a shift in the mindset of their owners toward mergers and consolidation. There is no other way.
_______________________________________________________________________________________
BSP rediscount loans down 37%  
By Paolo G. Montecillo
Philippine Daily Inquirer

In a statement Monday, the BSP said rediscounted loans by commercial, thrift and rural banks from the start of the year up to July reached P15.91 billion, down 37.1 percent from P25.29 billion in the same seven-month period last year.

The BSP’s rediscounting facility allows banks to sell their receivables to the BSP. Unloading their receivables to the BSP gives banks the cash to continue lending to businesses and households.

The BSP charges an annual interest rate of 3.5 percent for loans extended under the rediscounting facility, or the same as the central bank’s overnight borrowing rate.

The BSP said 82.3 percent of the rediscounted loans were commercial credits, 2.8 percent were for agricultural and industrial loans, while the remaining 14.9 percent were for companies’ capital expenditure needs, services, permanent working capital and housing loans.

At the end of June, domestic liquidity in the country grew 20.3 percent, the fastest expansion in six years, latest documents from the BSP showed. In the same period, loans expanded by 12.3 percent.
_______________________________________________________________________________________
 
FBRB | Federation of Batangas Rural Bankers
2013
Website powered by: Pinoys Interactive