According to real estate consultancy firm Pinnacle, the entry of foreign banks in the country should be considered as an opportunity to expand growth in the Philippines.
Pinnacle’s most recent Vista report tackles foreign banks in the Philippines and the changes they’ve brought about in the banking sector. With restrictions on foreign bank entry being eased, there has been much speculation on the impact that foreign banks on the local scene once they set up shop in the country.
There are currently 10 commercial banks and 6 universal banks that are foreign bank branches or subsidiaries. In addition, several foreign banks have expressed their interest in entering the Philippine market. Thirteen foreign banks have representative offices in the country as of the report’s writing.
According to Pinnacle, “the entry of these foreign “barbarians” should not be considered as a threat but an opportunity to expand growth in the Philippines and allow the Philippines to connect to cross border opportunities within ASEAN.”
In particular, Pinnacle foresees opportunities in cross border lending and investments, which can help in the government’s PPP and infrastructure partnerships, in increasing overall domestic/credit lending, an in decreasing OFW remittance costs. Pinnacle also believes that foreign banks can offer products such as mortgages to underserved sectors such as SMEs (small and medium enterprises) which can lead to a possible increase in condo sales and other investments.
Find out more about foreign banks and their impact on the local banking sector in Pinnacle’s full Vista report.