MANILA, Philippines — The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved the application of seven major banks to establish an additional 162 branches in the eight restricted areas in Metro Manila, the first batch of approvals in the liberalized bank branching policy.

In a statement yesterday, the BSP said it has granted two government banks and five second-tier commercial banks additional licenses to locate in the previously tagged restricted areas of Makati, Mandaluyong, Manila, Paranaque, Pasay, Pasig, San Juan and Quezon City. These are Development Bank of the Philippines, Land Bank of the Philippines, Eastwest Bank, Security Bank, Bank of the Commerce, Planters Bank and Philippine Business Bank.

BSP Circular 728 which liberalized bank branching was approved last June. “By opening these eight cities to branches, banks which are not yet deeply entrenched in these areas are provided the opportunity to have a physical base to deliver banking services to the public,” said the BSP.

The central bank will completely lift the bank branching restriction by mid-2014, ending a 15-year moratorium on the establishment of new banks/branches.

This will be done in two phases. Initially the Monetary Board has approved the partial lifting of the branching restriction in the cities of Makati, Mandaluyong, Manila, Paranaque, Pasay, Pasig, San Juan and Quezon City.

Phase I, which will end on June 30, 2014, is a special window available for private domestic banks (both commercial/universal and thrift) that have less than 200 branches in the restricted areas as of December 2010 to set up new branches.

Phase 2 is the full lifting of the branching restriction which will be on July 1, 2014, when branching in said areas will be open to all banks, except rural banks which are generally disallowed to open branches in Metro Manila.