THE Bangko Sentral ng Pilipinas (BSP) is seeing more investment inflows from foreign banks for digital banking in the country.
Governor Benjamin Diokno said in a press conference Friday that since the start of the country's digital banking framework in December 2020, the central bank anticipates growth in foreign investment in digital banking.
“In fact, a number of new and incumbent foreign banks have expressed intent to establish a new digital bank or convert their existing license to a digital bank license,” Diokno said.
BSP Policy and Specialized Supervision Sub-Sector managing director Lyn Javier said the central bank 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.
Moreover, Diokno said aside from opportunities in digital banking in the Philippines, foreign banks have huge prospects in partnering with the private sector in promoting investments in infrastructure and sustainable finance.
“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,” the BSP chief said.
He added that foreign banks have financing opportunities for big-ticket and long-term projects under the Build Build Build program.
There is also a growing acceptance for green and sustainable finance in the country, Diokno said.
“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 said.
With the liberalization of the entry of foreign banks, there are now 29 foreign banks operating in the country, of which, 12 are included in the 2020 list of Global Systemically Important Banks.
Diokno said that 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.
Deposits in foreign banks grew by 43.4 percent since the liberalization of the banking sector in 2014, “indicating trust and confidence in foreign banks even amid the pandemic”, Diokno added.
He said investment activities of these banks also reached PHP377.5 billion as of end-April this year. (PNA)
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