Bangko Sentral ng Pilipinas said it simplified the guidelines on the establishment of bank branches consistent with its policy to promote a competitive banking environment and ease business transactions.
Bangko Sentral said in a statement the policy-setting 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 new regulation removed the use of theoretical capital and the combined capital requirement tied to geographic location in evaluating branch applications, since the branch network size and location of head office were already embedded in the latest minimum capital requirement for banks.
The board also reaffirmed the general thrust of allowing banks to establish branches anywhere in the Philippines, including in the cities previously considered as restricted areas such as Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig, Quezon and San Juan.
“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,” it said.
Anchored on their overall business model and strategic direction, smaller banks may now establish branches in Metro Manila subject to higher capitalization and special licensing fee if said branches are to be located in the cities previously considered as restricted areas.
“The policy initiative is aligned with the BSP’s banking reform agenda that is anchored on the promotion of sound risk management systems and financial stability,” it said.
Data from Bangko Sentral showed the total banking offices increased to 10,936 in the second quarter from 10,849 in the first quarter, amid the continuous expansion of big lenders to widen their reach nationwide.
Of the total number, universal and commercial banks accounted for 6,133 branches, higher than 6,094 a quarter ago. There were 41 head offices of universal and commercial banks in the entire banking system.
The number of thrift banks’ offices, however, declined to 2,124 in the second quarter from 2,130 as of end-March, due to consolidation and exit of weaker players from the industry. There were 64 head offices of thrift banks.