A SENATE bill seeks to allow foreigners to own up to 40% of rural banks,
pointing out the need for investments to strengthen financial
institutions servicing the people in the countryside.
Sen. Edgardo J. Angara has filed Senate Bill (SB) 3089 that seeks to
amend Republic Act (RA) 7353 or the Rural Act of 1992.
"Non-Filipino citizens may own, acquire, or purchase up to 40% of the
voting stock of a rural bank," the bill read.
RA 7353 does not allow foreign ownership in rural banks.
"This policy deprives rural banks of foreign investment and effectively
restricts their activity and services," said Mr. Anagara in his bill's
explanatory note.
"The bill is expected to stimulate more lively activity among rural
banks by creating an environment that is beneficial to foreign
investors, local banking patrons and the national economy," he added.
Amending RA 7353 is one of the priorities of the Senate banks, financial
institutions and currencies committee chaired by Sen. Sergio R. Osmeña.
The House of Representatives has approved its own version, leaving it up
to the Senate to act on the initiative.
Rural Bankers Association of the Philippines (RBAP) President Ian Eric
S. Pama said his group supports the bill.
"RBAP fully supports the bill that will allow foreign equity in rural
banks," he told BusinessWorld in a text message on Friday.
Mr. Pama said the bill's enactment will "level the playing field with
our commercial and thrift bank counterparts."
RA 8791 or the General Banking Act of 2000 allows commercial and thrift
banks to have foreign investors.
"There will also be a transfer of technology and human resource
development," Mr. Pama added, "and an increase in loanable funds to the
countryside." -- Antonio Siegfrid O. Alegado
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