Business & Economy

Rural bankers thank PNoy for foreign equity law

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MANILA -- Sound economic policies of the Aquino administration will result in a significant amount of foreign investments in the long run, a group of rural bankers said Tuesday, a day after President Benigno Aquino III delivered his fourth State of the Nation Address (SONA).

 

In a statement, the Rural Bankers Association of the Philippines (RBAP) thanked Aquino for enacting the foreign equity law, which gives non-Filipino investors opportunity to own, acquire or purchase up to 60 percent of voting stocks in rural banks.

“As these happen, a favorable economic environment in the countryside can be made as foreign investors now have the option to infuse additional capital to rural banks especially now that we have the Foreign Equity Law in place,” said Vittorio Almario, the newly elected RBAP president.

Enacted in May, Republic Act 10574 or “An Act Allowing the Infusion of Foreign Equity in the Capital of Rural Banks, Amending RA 7353, Otherwise Known as the Rural Bank Act of 1992 as amended and For Other Purposes,” lifted the limit on bank ownership that has been a hindrance for the expansion of operations of rural banks for more than two decades.

Under the law, non-Filipino investors are now allowed to own, acquire or purchase up to 60 percent of voting stocks in rural banks, provided that the percentage of foreign-owned stocks will be determined by the citizenship of the individual or corporate stockholders of the bank.

“We are grateful for the able leadership of President Aquino for being supportive to the rural development through enactment of such laws. RBAP will remain one with its goal of fostering inclusive economic growth particularly in the countryside,” Almario said. 

With the country consistently receiving positive ratings and economic outlooks from international financial institutions such as the World Bank, Moody's Investor Service, and Fitch Ratings, Almario considered it a “good signal” to attract more foreign investors as these reflect a stable economy. 

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