PDIC backs foreign ownership of Philippine rural banks

The Philippine Deposit Insurance Corporation is supporting separate bills pending in the Philippine Congress that will permit foreign ownership of rural banks.

PDIC, the state-run Philippine deposit insurance fund, said the proposed amendments to the Rural Banking Act will increase the range of options needed by rural banks to strengthen their financial and organizational capabilities.

“A law allowing foreign ownership of rural banks will further enhance the initiatives to strengthen the banking sector,” said PDIC President Valentin Araneta.

The Bangko Sentral ng Pilipinas, the central bank, and the PDIC this August signed the memorandum of agreement on the Strengthening Program for Rural Banks Plus or SPRB Plus. The SPRB Plus Program will allow PDIC to grant financial assistance to the acquiring thrift and rural banks.

It aims to strengthen the thrift and rural banking industry to improve the delivery of financial services that will help sustain countryside development. It will be available until December 31, 2013.