A Malaysian bank expressed an interest in operating in the Philippines as a Qualified Asean Bank (QAB) shortly after the Bangko Sentral ng Pilipinas (BSP) and Bank Negara Malaysia (BNM) signed a banks entry agreement earlier this week, a BSP official said.
Earlier this week, the BSP and BNM agreed on the guidelines under the heads of agreement (HoA) that will allow QABs to operate subsidiaries in each other’s markets, marking a milestone in the broader Association of Southeast Asian Nations (Asean) community.
Following this, BSP Deputy Governor Nestor Espenilla Jr. said a Malaysian bank expressed an interest in entering the Philippine market.
Without disclosing the name of the bank, Espenilla said the lender is likely to be one of the biggest lenders in Malaysia.
“As a practical matter, being a QAB requires a lot of resources to go overseas, so most probably it is more attractive to the bigger banks especially those who have a regional ambition,” he said.
According to the Asean Banking Integration Framework (ABIF), QABs are normally well-managed banks headquartered in the region and majority-owned by Asean nationals.
Banks that apply for QAB status must be endorsed by the home country regulator to and may be accepted by the host country regulator based on their bilateral agreement.
Espenilla said that there are presently no applications from any Philippine banks to be a QAB.
Asked about additional bank entry pacts, Espenilla said there are no ongoing exploratory talks between the BSP and its other Asean counterparts, but that interests have been informally expressed.
“There has always been a lot of interest since we liberalized in 2014, to enter the banking market. So QAB is just one more possible option to consider. The overarching framework is Republic Act 10641, which has further liberalized the industry,” he said.