BSP says banking services now better

BSP says banking services now better

Filipinos have better access to banking services now compared to 10 years ago with the continued expansion in bank branches, even as the number of lenders declines, a senior Bangko Sentral ng Pilipinas (BSP) official said.

BSP Deputy Governor Nestor A. Espenilla, Jr. told reporters on Tuesday night that while the number of banks has fallen from a decade ago, the delivery of financial services continues to improve with more and more bank branches being added.

“If you ask me, banking services are far more accessible today than it was 10 years ago even though the number of head offices of individual banks is lower,” he said.

Data from the BSP showed that the number of bank head offices -- essentially the number of universal and commercial banks, thrift banks, and rural and cooperative banks -- fell to 797 as of September 2009 from 947 in December 2000.

The number of bank branches, meanwhile, reached 7,117 as of September from 6,607 in 2000.

Universal and commercial banks accounted for more than three-fifths of all branches, followed by rural and cooperative banks (19.5%), and thrift banks (17.21%).

The number of banks fell, Mr. Espenilla said, due to closures and mergers and consolidation.

Banks added branches when the BSP relaxed rules on bank branching in 2005.

That year, the BSP lifted the almost six-year moratorium on bank branching that allowed qualified banks to establish branches anywhere in the Philippines except in the cities of Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig and Quezon, and the Municipality of San Juan.

The BSP likewise allowed microfinance-oriented banks and microfinance-oriented branches of regular banks that cater primarily to the credit needs of micro-enterprises to be established anywhere, even in the still closed areas.

“In addition to the expansion of physical offices of banks, the non-traditional delivery channels are also growing,” Mr. Espenilla said, with the number of automated teller machines rising to 8,207 as of September from 3,680 in 2000.

He added that electronic banking services such as electronic wallets, cash cards and remittance centers are also growing.

Rural banks, meanwhile, accounted for almost four-fifths of the total number of head offices, but Mr. Espenilla noted that the sector holds less than 3% of the banking system’s total assets.

“[But] their total assets and deposits continue to grow. Rural banks are also very liquid, and their CAR (capital adequacy ratio) is well above what is required... ,” he said. “The only thing not growing is the number of rural bank offices because of consolidation.”

Lastest BSP data showed that the rural banking industry has a capital adequacy ratio of 18.41%, higher than the required 10% regulatory requirement.

Last month, the BSP said the consolidation in the banking industry would continue, led by rural banks, due to the P5 billion-fund it raised together with the Philippine Deposit Insurance Corp., which can be tapped for mergers and acquisitions. -- Don Gil K. Carreon

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