Philippines looks for mergers in banking sector Rosemarie Francisco
Manila, Jan 18: The Philippines central bank has said it would like to see more bank mergers, possibly involving foreign players, to strengthen the country's banking sector. The sector has already begun to consolidate with some recent mega-mergers, creating three major domestic competitors, but central bank governor Rafael Buenaventura said more were needed. "There is still some ways to go. Clearly, you have the three major banks successfully merging. It would be nice if we had five major banks," Buenaventura told Reuters late on Monday. "So we will try to continue to encourage mergers. We will try also to encourage the medium-sized banks to try to get together for survival." He said foreign banks might be allowed to own up to 100 per cent of local banks if pending banking legislation was passed. In the latest bank merger, the country's largest bank, Metropolitan Bank and Trust Co (Metrobank), bought 51 per cent of medium-sized Solidbank Corp early this month. Metrobank made its move after rivals Bank of Philippine Islands and Far East Bank and Trust Co announced a merger in October, threatening Metrobank's position. The country's third big bank, Equitable-PCI Bank, a rose from last year's merger between Equitable Banking Corp and Philippine Commercial International Bank. Buenaventura said it was difficult to pinpoint possibilities for creating another two major banks. A three-way merger between medium-sized domestic banks could do the job, but the hefty state-owned Philippine National Bank (PNB) has also been cited as a possible merger partner. "Obviously, PNB could be a major grouping depending on who it merges with because if they merge with one of the top 10 banks, then they would clearly move to number four," Buenaventura said. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd. All rights reserved throughout the world. Media Limited and hosted by CerfNet. feedback at financialexpress.com