Banking
From The Report: Philippines 2019
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With strong capitalisation and credit growth on the back of robust GDP figures and falling inflation, the Philippine banking sector now faces a year in which consolidation of gains and expansion into new demographics are on the agenda. The country continues to be well served by a variety of lenders, with universal and commercial banks supplemented by a wide array of thrift banks, rural and cooperative banks, and other microfinance institutions. Innovations in financial technology (fintech) are bringing banking to many more Filipinos via technological devices, while acting as a disruptor to traditional banking methods. There is increasing focus placed on smaller lenders as they gradually embrace fintech in a bid to extend their reach to unbanked and underbanked populations. This chapter also contains interviews with Benjamin E Diokno, Governor, Bangko Sentral ng Pilipinas; Nestor Tan, President and CEO, BDO Unibank; and Cezar Consing, President, Bank of the Philippine Islands.

Articles from this Chapter

Overview

Growing the base: Increased focus on the inclusion of small businesses and new demographics in the financial system
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With strong capitalisation and credit growth on the back of robust GDP figures and falling inflation, the Philippine banking sector now faces a year in which consolidation of gains and expansion into new demographics are clearly on the agenda. The country continues to be well served by a variety of lenders, with universal and commercial banks supplemented by a wide array of thrift banks, rural and cooperative banks, and other microfinance institutions. Innovations in financial technology (fintech)…

Interview

Capital injection: Benjamin E Diokno, Governor, Bangko Sentral ng Pilipinas (BSP), on boosting liquidity and encouraging innovation
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Interview:Benjamin E Diokno Which monetary policy tools can be used to ensure inflation stays within the central bank’s target? BENJAMIN E DIOKNO: With a primary mandate of price stability, the BSP has a wide range of tools to ensure inflation stays within the target range. In addition to overnight facilities, term deposit facilities (TDFs) – through which banks may park excess funds and earn interest on seven-, 14- and 28-day tenors – serve as a key tool for mopping up liquidity. The…

Interview

A proactive approach: Nestor Tan, President and CEO, BDO Unibank, on recent trends in local monetary, fiscal and regulatory policy-making
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Interview:Nestor Tan How have high inflation and the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) affected the banking sector? NESTOR TAN: The underlying components of the inflation increase in 2018 were issues with the rice supply chain, which is a fundamental part of the basket of goods; the rise in oil prices, which affected electricity and transportation costs; and the foreign exchange depreciation that resulted from the increase in interest rates in the US.…

Analysis

Innovative solutions: New technologies offer opportunities to boost penetration levels
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With financial inclusion a high priority for both the government and retail banks, which are looking to the untapped population to increase their customer base, recent developments in financial technology (fintech) have been greeted with great interest. In particular, the Bangko Sentral ng Pilipinas (BSP), the central bank, is increasingly looking to technology in order to leapfrog some of the current obstacles that many Filipinos face when it comes to opening a bank account, acquiring a home or…

Interview

Digital inroads: Cezar Consing, President, Bank of the Philippine Islands, on using new tools to broaden and deepen the market
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Interview:Cezar Consing In what ways has the evolution of banking technologies changed the services offered by institutions? CEZAR CONSING: Technology and digitalisation are key to reducing costs. Without these, banks can only serve large borrowers; but with the proper digital tools, it is possible to lower unit costs enough to serve those who require very small loans. With regards to investing in innovation, many banks are focused on their own operations: 80-90% of their IT spending is aimed…