The Philippines steps up rural bank shutdowns

A total of 10 smaller banks were closed in 2018 alone.

With the policy-making body under the Philippine central bank closing yet another savings and rural bank in the northern part of the country, the total number of rural and savings banks placed under liquidation this year hit 10. 

The two banks were shut down because of their ‘unsound financial condition.’

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The monetary board under the Bangko Sentral ng Pilipinas has directed the Philippine Deposit Insurance Corp. to proceed with the takeover and liquidation of single-unit thrift bank Malasiqui Progressive Savings.

Loan Bank Inc. is also another victim to the central bank’s liquidation campaign that has earlier closed down five-unit rural bank Rural Bank of Luna (Apayao) Inc within the same week.

The number of small bank closures in the first half of 2018 has already exceeded 2017’s full year figure of seven. The Monetary Board closed Cabanatuan City Rural Bank Inc., the Laguna-based World Partners Bank (A Thrift Bank) Inc., Rural Bank of Iligan City Inc., Rural Bank of Ragay (Camarines Sur), Rural Bank of Goa (Camarines Sur), Rural Bank of Barotac Viejo (Iloilo) and Countryside Cooperative Rural Bank of Batangas.

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The central bank earlier approved the relaunch of the Consolidation Program for Rural Banks, an initiative that aims to encourage mergers and consolidation amongst rural banks in recognition of the major role they play in providing financial services to far-flung communities in the country.

The Bangko Sentral said the relaunched CPRB would be available for two years, from Oct. 26, 2017 to Oct. 26, 2019.

Photo from Patrick Roque -CC BY-SA 4.0