ICBC gets BSP green light to start PHL operations
A CHINESE BANK has secured regulatory approval to operate in the Philippines, which comes at a time of warmer ties between the two nations.
The Bangko Sentral ng Pilipinas (BSP) has approved the application filed by the Industrial and Commercial Bank of China Ltd. (ICBC) to open a branch in Manila, a source familiar with the matter said.
The approval has not been announced in the Philippines as the Beijing-based lender has yet to make the announcement back home, being a publicly listed company at the Shanghai Stock Exchange and Stock Exchange of Hong Kong Ltd.
ICBC is the biggest lender in China in asset terms.
With the approval, ICBC is the 12th foreign lender to secure the BSP’s nod to start operations in the country, following the passage of a 2014 law allowing more global banks to offer their services here. It is also the first Chinese bank to set up shop in recent years after Bank of China’s entry in 2002.
Republic Act 10641 signed by then- President Benigno S. C. Aquino III lifted the limit that allowed only 10 foreignowned banks to operate in the country at any given time. Prior to this, a new foreign bank can set up a branch here only if one of the previously accredited foreign lenders pulls out.
Ties between Manila and Beijing grew cozier as President Rodrigo R. Duterte’s call for a “pivot” towards China was taken as a signal for increased trade and investments between the two nations.
Following Mr. Duterte’s visit to Beijing in October 2016, China has pledged around $7.34 billion in soft loans and grants for the Philippines over the past two years, according to the Department of Finance.
The Duterte administration is counting on these financing agreements to support its ambitious Build, Build, Build infrastructure program which needs some P8.44 trillion until 2022.
A strong middle class market and a young population make the Philippines more attractive for foreign players looking for new clients and for new sources of growth, BSP Deputy Governor Chuchi G. Fonacier previously said.
She added that foreign banks are likely following their corporate clients to sites where they expect increased trade and investment volumes.
Malaysia’s CIMB Bank won the nod of the Monetary Board to operate a full branch here, completing plans of its parent firm CIMB Group Holdings Berhad to expand their footprint in every country within the Association of Southeast Asian Nations.
Five Taiwanese banks have opened branches in the Philippines over the last three years: Cathay United Bank, Yuanta Commercial Bank Co. Ltd., First Commercial Bank, Hua Nan Commercial Bank Ltd., and the Chang Hwa Commercial Bank, Ltd.
The South Korean lenders Industrial Bank of Korea, Shinhan Bank, and Woori Bank also started their businesses here, as well as the Japan- based Sumitomo Mitsui Banking Corp. and the Singapore- based United Overseas Bank Ltd.