Banking

A positive feedback loop is at work in which banks are increasingly driving economic growth, supported by inflows of foreign investment and from Filipinos working abroad, while growing trust in the banking system is drawing greater volumes of savings. With real GDP roughly doubling between 1999 and 2014, bank deposits as a share of GDP also rose, from 40% in 1999 to 52% in 2014, while the number of bank deposit accounts per 1000 adults increased from 356 in 2004 to 542 in 2013. The 2014 reform, which is aimed at preparing for ASEAN banking integration, seeks to revive broader foreign investment in the banking sector by easing other obstacles that have put foreign banks at a disadvantage. Given the amount of ground that Philippine banks have covered in such a short period of time, it is inevitable that the pace of their growth will moderate from here. Still, Philippine banks have much going for them: rapid economic development; a young, consumerist demographic, a largely under-banked population; and a government that is boosting infrastructure spending.

This chapter contains interviews with Amando M Tetango Jr, Governor, Bangko Sentral ng Pilipinas; and Hikmet Ersek, President and CEO, Western Union; and a roundtable with Batara Sianturi, CEO, Citibank Philippines; Wick Veloso, CEO, HSBC Philippines; Herminio Famatigan Jr, President and CEO, Maybank Philippines; and Mahendra Gursahani, former CEO, Standard Chartered Bank Philippines.