More banks ordered closed this year — BSP
The Bangko Sentral ng Pilipinas (BSP) said it would not hesitate to shut down problematic banks, ordering the closure of two more as it continues to weed the industry of weak players.
The central bank’s Monetary Board has issued separate resolutions prohibiting Pangasinanbased Malasiqui Progressive Savings and Loan Bank Inc. and Rural Bank of Luna (Apayao) Inc. Both were placed under the supervision of the state-run Philippine Deposit Insurance Corp. (PDIC).
Malasiqui Progressive Savings and Loan Bank Inc. is a singleunit thrift bank located in Quezon Blvd. Extension, Brgy. Poblacion, Malasiqui, Pangasinan. It has 1,064 deposit accounts with total deposit liabilities of P73.5 million, of which 91.8 percent are insured.
On the other hand, Rural Bank of Luna is a five-unit rural bank with head office located in San Isidro Norte, Luna, Apayao, Cagayan Valley. It has branches in Abulug, Alcala, Allacapan and Buguey, all in Cagayan Valley.
The closed bank has 10,090 deposit accounts with total deposit liabilities of P213.13 million, of which 86.8 percent are covered by insurance.
This brought to 10 the number of problematic banks ordered closed by the BSP so far this year, exceeding last year’s seven padlocked banks.
Aside from the two banks ordered closed last week, the central bank’s Monetary Board has shut down the Rural Bank of Pagbilao
Inc., Rural Bank of Sta. Elena (Camarines Norte), Batangasbased Tiaong Rural Bank, Iloilo-based Bangko Buena Consolidated Inc., Batangas-based Women’s Rural Bank Inc., Rural Bank of Initao (Misamis Oriental) Inc., Empire Rural Bank Inc. in Lipa City, Batangas as well as the Rural Bank of Loreto (Surigao del Norte) Inc.
BSP Governor Nestor Espenilla Jr. said the regulator would not hesitate to close down banks to protect the public.
“Financial stability is something that we constantly advocate for our economy and to do that we have to strong measures. We had imposed a discipline of aligning our standards to global standards and we have also not hesitated to shut down banks that do not do what they are supposed to do in protecting the public,” he said.
Espenilla, who chairs the seven-member Monetary Board, added the BSP continues to weed out weak elements in the banking industry that create vulnerabilities to the Philippine economy.
“You know it is one of the toughest decision of the BSP whenever we have to close down a bank. But still it is our duty to protect the public from financial institutions that do not protect them,” the BSP chief said.
As a result, he said the country has a solid, strong and progressive banking system that continue to reach out to more people.
“More than a decade ago was seen as something very weak and very vulnerable and very prone to crisis,” he said.
The government currently provides incentives under the Consolidation Program for Rural Banks (CPRB) to encourage mergers and consolidations among small banks particularly rural banks to further strengthen and enhance the viability of the banking system.
The CPRB aims to improve financial strength, enhance viability and generate better return to shareholders; strengthen management and governance; generate synergies and economies of scale through common infrastructure, systems and resources; as well as expand the market reach of rural banks.