The Rural Bankers Association of the Philippines (RBAP) expressed gratitude to President Benigno Simeon Aquino III for signing into law the Foreign Equity Bill or Republic Act (RA) 10574, saying this will help create an environment conducive to economic growth in the countryside.
“The passage of the Foreign Equity Bill into a law is a major win not only for rural banks, but to the countryside as well. Now that foreign investments are allowed, 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 Atty. Edward Leandro Z. Garcia Jr., RBAP President.
In effect, Atty. 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. With the law in place, he said RBAP could now open its doors for talks on potential foreign investor partnership.
Apart from President Aquino, RBAP would also like to extend its appreciation to the legislators who showed support to the industry by diligently working on the swift passage of the measure.
“We commend the legislators in both chambers of Congress, particularly to the sponsors Senator Sergio R. Osmena III and Representatives Sergio A.F. Apostol, Rufus B. Rodriguez and the late Pedro Romualdo, for their steadfast commitment to ensure passage of this important piece of legislation that limited rural bank ownership to Filipinos for more than two decades. We also recognize the support of the Bangko Sentral ng Pilipinas and other stakeholders who shared with us the vision of a viable and sustainable rural banking industry that is responsive to the needs of many enterprising poor in the country, said Atty. Garcia.
Malacanang confirmed on Monday that President Aquino signed the measure into law, which amended RA 7353 or the Rural Banks Act of 1992.
Under the new law, foreign investors – individuals or entities – may now own up to 60% of voting stocks in rural banks. It also states that that the percentage of the foreign owned voting stock would be determined by the citizenship of the individual or corporate stockholders of the bank.
RA 10574 or “An Act Allowing the Infusion of Foreign Equity in the Capital of Rural Banks, Amending RA 7353, Otherwise Known as the Rural Bank Act of 1992 as amended and For Other Purposes” is a consolidation of House Bill 5360 as amended and Senate Bill 3282 as amended.
House Bill 5360 as amended was passed by the House of Representatives last January 3, 2013, while Senate Bill 3282 as amended was passed by the Senate last January 28, 2013. The bicameral conference committee report reconciling the two bills was ratified by both Houses of Congress last April 24, 2013.