The Bangko Sentral ng Pilipinas (BSP) sees more investment inflows from foreign banks for digital banking in the country.
BSP Gov. Benjamin Diokno told a press briefing Friday that since the start of the country’s digital banking framework in December 2020, they anticipates growth in foreign investment in digital banking.
Diokno said a number of new and incumbent foreign banks in fact “have expressed intent to establish a new digital bank or convert their existing license to a digital bank license.”
BSP Policy and Specialized Supervision Sub-Sector managing director Lyn Javier revelaed that BSP has received queries and interest from foreign banks in Europe and Asian regions.
At least three banks have completed phase one of the licensing process for digital banks, Javier said, adding that the BSP will continue to evaluate other applications upon submission of complete documents.
Aside from opportunities in digital banking in the Philippines, Diokno also said foreign banks have huge prospects in partnering with private sector institutions in promoting investments in infrastructure and sustainable finance.
He said “foreign banks have the capacity to pool funds to finance infrastructure projects in key sectors such as renewable energy, low carbon transport, sustainable water management, and sustainable waste management.”
He further added that foreign banks have financing opportunities for big-ticket and long-term projects under the national government’s Build Build Build program, and there is also a growing acceptance for green and sustainable finance in the country.
“With global market expertise, foreign banks can facilitate the underwriting of green, social, or sustainability bonds or develop innovative sustainable finance instruments. Given their global market expertise, foreign banks can facilitate underwriting of green, social, or sustainability bonds or finance infrastructure projects in key sectors such as renewable energy and low carbon transport,” he pointed out.
There are now 29 foreign banks operating in the country, 12 of which are included in the 2020 list of Global Systemically Important Banks, with the liberalization of the entry of foreign banks. As of end-April 2021, the combined assets of these foreign banks amounted to PHP1.4 trillion, or 7 percent of the banking system’s total assets, the BSP governor shared.
Diokno added that deposits in foreign banks grew by 43.4% since the liberalization of the banking sector in 2014, “indicating trust and confidence in foreign banks even amid the pandemic.”
As of end-April this year he said investment activities of these banks also reached P377.5 billion.