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BSP urges RBs to become catalysts in rural growth |
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By Ted P. Torres
The Philippine STAR 07/06/2004 The Bangko Sentral ng Pilipinas (BSP) is challenging the rural banking system to establish itself as the lead catalyst in stimulating economic development in the countryside. "Rural banks serve an important niche of our economy – the borrowers in the grassroots," BSP Governor Rafael B. Buenaventura said during induction ceremonies of the new officers and directors of the Rural Bankers Association of the Philippines (RBAP). "That makes rural banks a major partner in countryside development, that will enable us to meet the bigger challenge of building strong local economies for a more equitable economic growth," Buenaventura added. Government upped the ante by offering incentives by issuing BSP Circular 426 which sets the guidelines for the extension of the countryside financial institutions enhancement program (CFIEP). The program is open to all CFIs including rural banks cooperative banks and thrift banks. The program offers incentives including the relaxation of equity ownership ceilings for individuals, cooperatives and corporations for a period not exceeding 20 years. It offers a waiver of penalties and other charges due on arrearages redeemable under the program. The total resources of the rural banking system grew by 10.3 percent last year outperforming the 4.5-percent growth in the country’s gross domestic product (GDP) and the single-digit growth of the commercial banking system. That prompted the BSP to call the RBs efforts as a "commendable." "Under conditions of modest economic growth and sound financial environment last year, the rural banking system turned in a commendable performance," Buenaventura said. The industry also posted a 12.3-percent increase in deposit mobilization and a 9.1-percent expansion in capital accounts. Total assets grew by an average 12.3 percent per annum since 1995. The non-performing loan (NPL) ratio fell to 12.1 percent while real and other properties acquired and owned (ROPOA) dropped by 1.7 percent. In the past five years, the industry’s past due ratio had been in a downtrend. Return on assets (ROA) went up 1.8 percent while return on equity (ROE) improved to 11.3 percent. "All these indicators suggest a vibrant rural banking system," Buenaventura said. There are approximately 1,809 rural banking offices operating in the country, composed of 724 head offices and 1,085 branches/other offices. The number of head offices of rural banks (724) is 17 times that of the commercial banks‚ 42, and almost eight times that of thrift banks‚ 93. Including branches and other offices, the rural banking system comprises almost 25 percent of the physical network of the Philippine banking system. It covers every region of the country, and they are present in 859, or 54 percent of the total cities and municipalities. Almost two-thirds (63 percent) of the RBs offices are located in 3rd, 4th, 5th and 6th class municipalities, areas that need the most in development assistance and support. Seventy-five percent of the rural banks have assets of P100 million and below. Only four rural banks have assets of more than P1 billion. And perhaps because of their size, they have a flexibility to provide services and gain access to the countryside. Last year, two microfinance-oriented banks were opened while an existing rural bank converted to a microfinance-oriented rural bank. Nearly half of the rural banking system is practicing microfinance in varying degrees. In fact, total assets of microfinance-oriented rural banks reached P473 million last year from a mere P31 million in 2002. |
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Circular Letters/Memoranda |
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Speeches/ Presentations |
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Photo Gallery |
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The 2008 RBAP Charter Symposium |
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2008 CFI Awards |
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Rural Banking Week Celebration Golf Tournament |
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Client Satisfaction Survey for Licensing Management System of the Supervision and Examination Sector |
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Financial Reporting Package 2008 |
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BSP releases regulations on liquidity, market risk weighting |
