New law allows 60% ownership in Philippine rural banks
President Benigno Simeon Aquino signs Republic Act 1057 into law.
Foreigner investors may now own as much as 60% equity in Philippine rural banks under RA 10574 or An Act Allowing the Infusion of Foreign Equity in the Capital of Rural Banks. With this law in place, rural banks can open their doors to foreign investor partnership,
Under the new law, foreign investors (individuals or entities) may own up to 60% of voting stocks in rural banks. The percentage of foreign owned voting stock will be determined by the citizenship of the individual or corporate stockholders of the bank.
The Rural Bankers Association of the Philippines said the new law will help create an environment conducive to economic growth in the countryside.
RBAP said the passage of the Foreign Equity Bill into law is a major win for rural banks and also for the clients in the countryside.
“Rural banks are now in a better financial position to reach out and serve both the unbanked and under-banked through improved banking services. We expect continuous development in the countryside especially now that rural banks are made even stronger and sustainable,” said RBAP president Atty. Edward Leandro Garcia.
Garcia said the measure would provide an additional source of capital for rural banks, placing them on a level playing field with thrift and commercial banks.