Bankers express alarm over closure of rural banks

Published February 25, 2019, 11:00 PM

by Ellalyn De Vera & Richa Noriega

By Marie Tonette Marticio

DULAG, Leyte
– The Rural Bankers Association of the Philippines (RBAP) expressed alarm over the increasing number of rural banks closing in the country.


Rural Bankers Association of the Philippines (FACEBOOK / MANILA BULLETIN)
Rural Bankers Association of the Philippines (FACEBOOK / MANILA BULLETIN)

Dr. Armando Bonifacio, RBAP president disclosed that 139 rural banks have alrrady closed since 2009, 22 of which are the only banks in their areas – resulting to unbanked municipalities.

Hence, they call on lawmakers to amend some provisions in the Rural Bank Act of 1992 (RA 7352) specifically Sections 2, 3, 11 and 14 in order to save some of their banks which are experiencing financial difficulty.

“Maraming mga provisions ang batas na hindi na pinapatupad, kagaya ng kung ang isang bangko ay namomomroblema sa kapital, kailangang tulungan ng DBP at Landbank hanggang sa makabangon ito. They should infuse capital, hindi sinabing isasara siya,” he pointed out.

He added that one of the difficulties that they are experiencing in lending money to their clients is the non-distinction of stringent regulations imposed between big and small banks.

Leyte 2nd district Rep. Henry Ong-Banks and Intermediaries Committee Chair vowed to support the proposed revisions on said law in order to promote comprehensive rural development.

“The development of our country should start from the rural areas. We will look into these proposals because we also want to attune this to the need of our people since that is our primary mandate,” he said.

He also cited a report by the Bangko Sentral ng Pilipinas, which disclosed that 70 percent of the towns in Eastern Visayas are unbanked.

“Right now our farmers and fisherfolks have no choice but to rely on illegal lending institutions, pawnshops and capitalists, but if we will have more banks who can provide them with low-interest loans coupled with financial literacy, we can give them hope and contribute for the future of our economy,” he explained.