Tetangco: Thrift banks will keep economy on the growth track

Tetangco: Thrift banks will keep economy on the growth track

BY JIMMY CALAPATI

"I believe that thrift banking industry will continue to keep our economy on the growth track," Bangko Sentral ng Pilipinas (BSP) governor Amando Tetangco said during last week’s national convention of the Chamber of Thrift Banks (CTB).

Tetangco, in his speech, said that the BSP and CTB share the same objective "to have a sound and stable banking system as well as to contribute to the realization of our country’s social and economic aspirations."

"Thrift banking industry accounts for roughly 10 percent of deposits, loans and capital of the banking system. In 2010, both our economy and thrift banking industry did quite well," he said.

Between December 2005 and December 2010, Tetangco said that consolidated deposits in thrift banks grew 88 percent to P491 billion.

While net loans increased by 87 percent to P345 billion.

In the same five-year period, total assets of the thrift banking industry expanded by 75 percent to a record high P606 billion while capital increased 47 percent to an all time high of P66.8 billion in December 2010.

Likewise, the thrift banking industry has expanded its client reach with an increase in the number of its members’ branches, from 1,333 to 1,419 as of December 2010, 80 percent of these offices and branches are located in Luzon, 14 percent in Visayas, and 6 percent in Mindanao.

"Based on the track record, indeed, these are well and good," Tetangco said.

THE NEED TO CONTINUE REFORMS

But beyond these numbers, Tetangco said that they see the need to continue to pursue necessary reforms that will transform banks into even better and stronger institutions.

"Banks that adhere to good governance practices and banks that operate in a safe and sound manner as part of its total customer care commitment. Let us not forget that banking is imbued with public trust," Tetangco said.

From a developmental perspective, the central bank chief said that they can streamline processes to become more efficient, invest more to strengthen the core competencies of bankers, and strengthen guidelines that protect the public from potential abuse and malfeasance.

"While our banking sector remains sound and stable, we should not be complacent. The market landscape continues to shift and change…. and so should we. And at all times, good governance will be the key to long-term sustainable growth," he added.

"We have shown the world how strong the Philippine banking system can be under the most difficult of global conditions. As we face new challenges, (we should) re-affirm our strength by continuously advocating faithful adherence to good governance practices," Tetangco said.

In a bid to create stronger institutions, the central bank issued new rules that raised the capital requirement for new thrift banks.

Thrift banks that locate their head offices in Metro Manila, for instance, must have a minimum capital requirement of P1 billion instead of P325 million while those in Cebu and Davao, are required to have P500 million instead of P52 million.

TO FOCUS ON CONSUMERS, ENTREPRENEURS

Riding high after a bullish economy in 2010, the country’s thrift banking industry seeks to sustain the wave of momentum this year by focusing on consumers and entrepreneurs as key drivers for economic growth.

The Chamber of Thrift Banks (CTB), the industry’s umbrella organization, says that the optimistic economic outlook in 2010 in which the Philippines ranked 3rd globally, resulted in increased consumer spending and setting up of businesses, especially Micro, Small, and Medium Enterprises (MSMEs).

CTB and HSBC Savings Bank President Patrick Cheng said that as people feel good about the state of the economy, "they want to spend their money wisely and they want to engage in putting up businesses."

"CTB wants to seize this opportunity by continuing to generate deposits, creating more opportunities for lending, implementing more aggressive marketing programs, and increasing the public’s confidence in thrift banks," Cheng said.

This year’s CTB Convention Chairman and BPI Family Savings Bank President Jose Teodoro Limcaoco said that "CTB wants to capture this as they celebrate their 37th founding anniversary."

"As CTB realizes the importance of consumers and entrepreneurs in keeping our industry and economy on track, we are incorporating the theme Thrift Banks: Fuelling Consumers and Entrepreneurs as Engines for Sustained Economic Growth in our annual convention," Limcaoco said.

According to CTB, the theme of the convention which was held this year at the Dusit Thani Hotel, highlights the thrift banking industry’s commitment to provide first-class products and services to their niche markets and sees that this convention will be the biggest one that they have had so far.

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