The Joint Foreign Chambers (JFC) laud the ongoing effort to allow the participation of still more foreign banks in the country, saying this was consistent with the envisioned financial sector integration happening in 2020.

The J'FC expressed its support for Senate Bill 2159 and House Bill (HB) 3984, which both seek to amend Republic Act (RA) 7721 and further liberalize the entry and scope of operations of foreign banks.

In a joint statement, the JFC said the amendments to the Foreign banks Liberalization Act would prepare the Philippines for Association of Southeast Asian Nations (Asean) financial integration.

"[HB 3984] is consistent with the Asean Banking Integration Framework under which so-called Qualified Asean Banks can operate within Asean jurisdictions on equal terms as domestic banks of that jurisdiction subject to certain prudential and governance standards.

RA 7721, promulgated in 1994, was intended to create a liberalized and more competitive banking system. The law allowed the entry of foreign banks either through ownership of up to 60 percent of the voting stock of an existing domestic bank or of a new banking subsidiary or establishment of branches with full banking authority.

Through the amendment of the 20­year law, foreign ownership will be increased up to 100 percent, paving the way for more competition and capital to the benefit of the public.

"Moreover, the amendment is consistent with the policy direction of the Bangko Sentral ng Pilipinas to introduce reforms to make the banking industry responsive to the needs of stakeholders and market conditions," it said. JFC believes that the increased participation by foreign banks will help sustain the growth of the Philippine economy.

JFC's published Arangkada Philippines 2010 has recommended macroeconomic policy changes that allows for more foreign banks to operate under less restrictive ownership restrictions.

"The committee approval on March 5 of HB 3984 and the filing of the counterpart SB [Senate Bill] 2159 is a good start toward the completion of this recommendation," the organization said.

The JFC, which includes the American Chamber of Commerce of the Philippines Inc., the Australian­New Zealand Chamber of Commerce (Philippines) Inc. the Canadian Chamber of Commerce of the Philippines Inc., the European Chamber of Commerce of the Philippines Inc., the Japanese Chamber of Commerce & Industry of the Philippines Inc., the Korean Chamber of Commerce of the Philippines Inc. and the Philippine Association of Multinational Companies Regional Headquarters Inc. has sent letters of support for the said bills to Senate Banks Committee Chairman Sergio Osmena III and House of Representatives Banks Committee Chairman Sonny Collantes.

Source: Business Mirror, 18 March 2014