3 ways for banking sector to help country ‘move forward’

THE NEW president of the Bankers Association of the Philippines outlined three main thrusts of the banking industry to complement the economic growth of the country.

In a press conference last Wednesday in Cebu City, BAP president Alberto Villarosa, who is also president and chief executive officer of Security Bank Corp., said the banking sector aims to move forward with the economy.

“The Philippines is no longer the ‘sick man’ in Asia. We are out of the hospital and now on solid ground moving forward. We believe that we have to work with government to fuel this growth,” said Villarosa.

Villarosa said the banking sector is working to develop a deep and active capital market, to make funds available to the small and middle market, and to improve internal bank structures.

Villarosa said with the improved economy, he was expecting more corporations to grow, which could in turn increase funding requirements.

“We’d like to focus on the capital market. It should be developed to be able to support the kind of growth that we would like to happen for our economy,” said Villarosa.

For this, Villarosa said the banking sector is ready to work with government to stimulate the development of an active and stable capital market.

While the capital market caters to corporations with big financial requirements, Villarosa said the banking sector is also making services available to small and medium enterprises.

“The BSP (Banko Sentral ng Pilipinas) has been encouraging banks to put up branches in the countryside, even waiving the P20 million fee that they ask when a bank applies for a new branch opening. BAP supports that move,” said Villarosa.

He said three of Security Bank’s competitors were setting up Micro Banking Offices in rural areas to serve this sector.

He said Security Bank plans to continue expanding in the Visayas and Mindanao areas.

“Countryside banking – we are going in that direction and we are studying a lot of ways to do that and make our products available to the SMEs,” said Villarosa.

To achieve all these, he said a a strong banking system is needed, which starts with improving internal bank structures.

“The banking system has never been stronger and each banking institution together with BSP has been trying to improve our structures,” he said.

Villarosa said in the past when a bank would close, the whole system would shake with it.

He referred to the financial crisis in 1997 and 2003.

But now, he said, a bank closing is viewed as an isolated case and no longer affects operations or public confidence in other banks. He said this is an indicator that the banking system in the Philippines has become stronger.

He said the country would still feel the effects of the ongoing European economic crisis but the Philippines would cope with it better after having endured the Asian financial crisis in 1997.

Villarosa said the BSP is already talking about implementing Basel 3 in 2013 which shall address capital and liquidity in the banking sector.

“Governance issues should also be addressed. There is nothing more attractive to investors than clear cut governance rules in our banking system,” said Villarosa.

He also urged banks not to be complacent amid the continuing positive growth of the sector.