MANILA, Philippines - Banking presence in the Philippines remained concentrated in highly urbanized and higher income areas particularly in the National Capital Region, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The BSP reported the banking system’s landscape in the country is now leaner and attuned to market needs as the number of operating banks have declined to 638 as of end June from 664 in the same period last year.
The figure is way below the peak of 996 operating banks in 1998 when the central bank started rationalizing the merger and consolidation incentives for banks.
“Amid an evolving global financial landscape, banks were compelled to streamline their operations and seek alternative ways to grow their market. This strategy has led to the ongoing industry consolidation which contributed to a leaner operating network,” the BSP said.
The banking industry is composed of 36 universal and commercial banks, 70 thrift banks as well as 532 rural and cooperative banks. These include 17 private banks, 20 foreign banks, three government banks, 66 standalone thrift banks as well as 532 rural and cooperative banks.
“Despite further liberalization of foreign bank entry in the Philippines, domestic banks remain as key market players,” the BSP said.
In terms of network, the industry had 10,528 branches, other offices and representative offices abroad in end June from 10,120 in end June last year.
“This has led to a more inclusive financial system with more banking offices serving as vital financial access points that cater even to the unbanked or underserved population,” the central bank said.
The BSP noted bank coverage was predominant in the National Capital Region (NCR) with 3,318 head offices and branches followed by Cebu and Davao with a total of 480 banking offices.
Region 4-A or Calabarzon emerged as the second region with widest bank coverage with 1,581 head offices, branches and other offices followed by Region 3 or Central Luzon with 1,060.
Region 7 or Central Visayas placed fourth with 615 while Region VI or Western Visayas completed the top 5 regions in terms of bank coverage with 414 branches and other offices.
The central bank added universal and commercial banks have expanded their reach in areas considered as the home turf of rural banks particularly in first to third-class municipalities.
“Network expansion in these areas is indicative of banks’ initiatives to support inclusive growth by providing access to finance for all Filipinos, regardless of their socio-economic status,” it said.
BSP Governor Amando Tetangco Jr. earlier said the Philippines has been broadening and deepening the reach of the country’s financial system to get to the unserved and underserved.
The BSP has linked up with 12 other government agencies to craft and implement a National Strategy for Financial Inclusion (NSFI) to mainstream Filipinos as regular clients particularly MSMEs; overseas Filipinos and their beneficiaries; agriculture and agrarian reform sectors; indigenous peoples and cultural minorities; women; youth; and persons with disabilities.