103 LIBERALIZED ENTRY AND SCOPE OF OPERATIONS OF FOREIGN BANKS.
a. By acquiring, purchasing or owning up to 100% of the voting stock of an existing domestic bank (including banks under receivership or liquidation, provided no final court liquidation order has been issued);
b. By investing in up to 100% of the voting stock of a new banking subsidiary incorporated under the laws of the Philippines; or
c. By establishing a branch and sub-branches with full banking authority.
a. Widely-owned and publicly-listed in the country of origin, unless the foreign bank applicant is owned and controlled by the government of its country of origin; and
b. Established, reputable and financially sound.
a. Geographic representation and complementation. Representation from the different parts of the world and/or the international financial centers shall be ensured.
b. Strategic trade and investment relationships between the Philippines and the home country of the foreign bank. Consideration shall be given to the countries of origin of applicant foreign banks –
(1) With substantial financial assistance to, and loans and investments, past and present, in the Philippines; and
(2) With which the Philippines has significant volume of trade especially to those with which the country has substantial net exports.
c. Relationship between the applicant bank and the Philippines. Consideration shall be given to the capability of the foreign bank to promote trade with, and to bring foreign investments into, the Philippines. Long standing financial and commercial relationship with, and assistance extended to, the Philippines, shall likewise be taken into account.
d. Demonstrated capacity, global reputation for financial innovations and stability in a competitive environment of the applicant bank.
e. Reciprocity rights enjoyed by Philippine banks in the applicant’s country. Subject to the host country’s rules and regulations of general application, Philippine banks should have the opportunity to establish operations in the foreign bank applicant’s home country.
f. Willingness to fully share banking technology.
a. For locally incorporated subsidiaries. A foreign bank subsidiary shall comply with the minimum capital and prudential capital ratios applicable to domestic banks of the same category as prescribed under prevailing regulations.
b. For foreign bank branches
(1) A foreign bank branch shall comply with the minimum capital and prudential capital ratios applicable to domestic banks of the same category as prescribed under prevailing regulations.
(2) For purposes of compliance with minimum capital regulations, the term “capital of a foreign bank branch” shall refer to the sum of: (a) permanently assigned capital, (b) undivided profits, and (c) accumulated net earnings, which is composed of unremitted profits not yet cleared by the Bangko Sentral for outward remittance and losses in operations, net of applicable capital adjustments enumerated in Sec. 121.
(3) Permanently assigned capital shall be inwardly remitted and converted into Philippine currency at the exchange rate prevailing at the time of remittance.
(4) Any Net due from head office, branches and subsidiaries outside the Philippines, excluding accumulated net earnings, shall be deducted from capital.
(5) For purposes of compliance with the SBL, the capital of a foreign bank branch, subject to prescribed adjustments, shall be synonymous to its “net worth”.
a. Minimum capital of foreign banks.
(1) Loans and credit commitments of foreign bank branches as of 07 August 2014 may be maintained, but once repaid or expired, shall no longer be increased in excess of the ceiling allowed under the succeeding paragraph.
(2) Existing foreign bank branches shall be given until 31 December 2019 to use twice the level of capital as defined in this Section as net worth, as reference point for purposes of determining the appropriate SBL.
a. Foreign bank branches shall comply with the same risk-based capital adequacy ratios applicable to domestic banks of the same category.
b. In computing the risk-based capital adequacy ratios, Common Equity Tier 1 (CET1) capital shall include permanently assigned capital, undivided profits, accumulated net earnings and other capital components.
c. Any Net due from head office, branches and subsidiaries outside the Philippines, excluding accumulated net earnings shall be deducted from CET1 capital.
d. The guidelines for computing the risk-based capital adequacy ratios are provided in Appendix 59.
a. Suspension of entry of additional foreign bank subsidiaries and branches; and
b. Suspension of license upgrade or conversion to subsidiary of existing foreign bank branches.