June 17, 2014
Drilon: Major banking overhaul seen to attract
Senate President Franklin M. Drilon today expressed confidence that the lifting of the cap on foreign ownership of banks will attract more investments, perk up the banking sector and ultimately, boost the economy.
The Congress, shortly before its First Regular Session adjourned, approved a measure amending Republic Act No. 7721, otherwise known as an Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines, to allow the full entry of foreign banks in the country. The bill will be sent immediately to the Office of the President for approval, said Drilon.
"The immediate enactment of this measure will be a big boost to the administration's emerging economic policy which is to open up the economy to direct foreign investments," emphasized Drilon.
"If we really want to lure investors to come in, we have to amend the policies that block foreign investments, while we address the biggest investment turnoff which is corruption," said Drilon.
Once the measure is enacted into law, Drilon explained that established and reputable foreign investors will be allowed to have full ownership of domestic banks in the country.
By doing so, Drilon said that he expects a significant increase in the flow of direct foreign investments which in return, will improve our financial and economic portfolio.
"I am confident that President Aquino will approve this measure for the benefit of our economy and our people. The additional resources to be generated from the measure can be tapped to fund social services and infrastructure projects much needed by our Filipinos," he added.
Under the bill, all the privileges currently being granted to domestic banks will also be extended to locally incorporated subsidiaries of foreign banks.
The Senate leader concluded that the measure will align our country's banking system with the forthcoming implementation of the ASEAN banking integration framework, which aims to facilitate infusion of foreign investment into various ASEAN communities.