Thrift banks prepare for AEC 2015 | | Philippine News
Home  » Business » Banking & Finance » Thrift banks prepare for AEC 2015

Thrift banks prepare for AEC 2015

The country’s 71 thrift banks are preparing for the challenges, risks and advantage of regional market expansion when the Asean Economic Community (AEC) is officially in place next year.

“This new system (Asean Integration In 2015) would set up a free-for-all single market for this thriving region of 600 million inhabitants. This also means new markets for us in the thrift bank industry and for micro, small, and medium enterprise (MSME) clients,” said China Bank Savings president Alberto Emilio Ramos who is this year’s Chamber of Thrift Banks’ national convention chairman.

Ramos said as markets grow, the thrift banking sector which has a large share of the commercial loans business will have to be mindful of steps to take to be able to ride the tide of increased regional banking competition, which with the Asean Banking Integration Framework or ABIF, will also begin in 2015 and should reach semi-integration as early as 2018.

“Thrift banks (will have) to prepare for the challenge of market expansion, as well as our MSME market, who stand to be affected by the changes brought about by ASEAN Integration,” Ramos emphasized.

The upcoming national convention will address these issues, he added. To reacquaint thrift banks to AEC 2015 and be more prepared for what is in store for the banking industry, the organization has invited Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., BSP Deputy Governor Nestor A. Espenilla Jr., and Department of Trade and Industry assistant secretary Rafaelita Aldaba as speakers during the convention with the theme “Thrift Banks: Preparing For Asean Integration.”

Ramons stressed the importance of preparedness as the Philippines link with Asean in a “new chapter in regional trade.” “(It’s an) informative time for us as we equip ourselves for the upcoming ASEAN Integration,” he said.

With increased regional trade and finance cooperation, more local banks are also expected to look at possibilities of merging or consolidating to cut on risk management costs and to improve on good governance.

For the past two years, the BSP and the Philippine Deposit Insurance Corp. have been granting additional incentives such as financial assistance and regulatory relief to encourage more consolidations among the bigger banks and the smaller thrift and rural banks.