MANILA, Nov 5 (Reuters) – Philippine financial regulators agreed on Friday to streamline documentary requirements and cut by two thirds the processing time of bank mergers and acquisitions, in an effort to encourage consolidation in a sector crowded by small lenders.
The country’s banking industry, while small in its entirety, is overcrowded with more than 500 banks, mostly rural lenders, operating across the archipelago of 7,600 islands.
Regulators have for years been pushing them to consolidate.
The top 10 universal banks in the Philippines had $303 billion in combined assets as of end-June, equivalent to just two-thirds of the total assets of Singapore’s DBS Bank, government data show.
The new rules agreed by the central bank, the securities regulator and anti-monopoly agency will reduce documentary requirements of M&A proposals to 30 from 58, and cut processing time to 55 business days from an average of 160 days.
“We acknowledge that mergers, consolidations and acquisitions can catalyse innovation in any industry, including banking, because of combined resources and expertise,” Arsenio Balisacan, head of the county’s competition commission, said in a joint statement.
In a country where half of the 110 million population does not use a bank, the Philippines is keen to develop the lending sector, worth $387 billion in assets, to drive future economic growth.
(Reporting by Neil Jerome Morales; Editing by Martin Petty)
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This article originally appeared on reuters.com