Posted in July 2009.
The Central Bank of the Philippines supervises the nation’s banking system. Nonbank financial intermediaries such as private insurance companies are overseen by the Insurance Commission and the Securities and Exchange Commission.
The largest domestic banks, in order of size, are Metropolitan Bank and Trust (Metrobank), Bank of the Philippine Islands, Equitable-PCI Banking Corporation, Land Bank of the Philippines, Philippine National Bank, Development Bank of the Philippines, Rizal Commercial Banking Corporation, Banco de Oro, Allied Banking Corporation, and China Banking Corporation.
There also are 32 other universal and commercial banks. Four of the banks are owned or controlled by the government: the Land Bank of the Philippines, the Philippine National Bank, the Development Bank of the Philippines, and the Al-Amanah Islamic Bank. In addition, the banking sector includes 93 thrift banks (savings and mortgage banks, stock savings and loan associations, private development banks, and micro-finance institutions) and 771 rural banks. The universal and commercial banks and the largest thrift banks have licences to operate foreign-currency deposit units.
Foreign banks provide competition to local banks and are active in investment banking, asset management, and foreign-exchange and derivatives trading. Although they have a small market share and branch networks are not extensive, the expertise and reputation of the foreign banks attract customers.
The banking sector was relatively undamaged by the Asian financial crisis of 1997–98, and since 2001 asset quality has improved. In July 2005, nonperforming loans declined into the single digits (9.3 percent), half the peak level (18.8 percent) recorded in October 2001. This progress reflects the positive impact of the Special Purpose Vehicle Act of 2002, which provided incentives to financial institutions to reduce non-performing assets. Another trend in commercial banking is toward consolidation and restructuring.
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