Philippine banks face more mergers

Driven by approaching ASEAN economic integration.

More mergers and consolidations among Philippine banks are expected to take place ahead of the creation of the ASEAN Economic Community in 2015.

SM Investments Corporation chief finance officer Jose Sio believes there will be more consolidations and mergers to sustain the Philippines in the long run since ASEAN integration will affect not only the banking industry but other businesses as well.

Sio said Philippine banks needed to become stronger to compete against other ASEAN banks that might decide to expand in the Philippines. He said he was certain ASEAN banks will expand into the Philippines. Many discussions are going on around about mergers, he said.

With the ASEAN integration, competition in the banking industry would be stiffer as banks in other ASEAN countries are bigger. He said while BDO Unibank, the Philippines’ largest bank, is smaller than other ASEAN banks. “BDO has P1.3 trillion total resources, the biggest in the Philippines.

But we are down there, in the 16th place . . . The bigger banks are in Malaysia, Thailand, and Indonesia, When that (integration) thing comes, we don’t know what will happen,” Sio said.