The Bangko Sentral ng Pilipinas (BSP) has a new program to strengthen rural banks’ operation and function as the bank for rural and agricultural communities.
The Rural Banking Industry Strengthening Program (RBSP), currently being set up, replaces the Consolidation Program for Rural Banks (CPRB).
The RBSP will be implemented by an inter-agency working group (IAWG) chaired by BSP Monetary Board member V. Bruce J. Tolentino. The IAWG includes the BSP, the Department of Agriculture and the Department of Trade and Industry.
Tolentino, an economist and the BSP’s agricultural and food security expert, said rural banks play a critical role in financial inclusion and inclusive growth.
The IAWG steering committee’s technical working group (TWG) is finalizing the action plan for the RBSP such as the the development of a capacity-building program for rural banks.
Tolentino said there is no budget yet that has been decided at this stage. “We are still studying the issues and formulating a program,” he said Friday. “Once the program is in place, it will include a budget.”
The CPRB, which was implemented for more than five years, had a financial assistance of P25 million.
The RBSP is expected to “boost the resilience of the rural banking industry which is a key agent of countryside development as it provides financial services to rural communities, including micro, small and medium enterprises,” according to BSP Governor Benjamin E. Diokno in a statement.
The IAWG had its first meeting on June 1 to lay down the program details and future plans. An initial package of proposed policies, programs and reforms are expected to be submitted the Monetary Board by the end of this year.
BSP Deputy Governor Chuchi G. Fonacier will chair the TWG, with other members such as the Agricultural Credit Policy Council, Land Bank of the Philippines, Development Bank of the Philippines, Securities and Exchange Commission, Philippine Deposit Insurance Corp., and Rural Bankers Association of the Philippines. The TWG senior advisers are Dr. Mario B. Lamberte of the University of the Philippines Public Administration Research and Extension Services Foundation and Dr. Gilberto M. Llanto of the Philippine Institute for Development Studies.
The BSP is regulating 406 rural banks as of end-March this year. The rural banking sector had a cumulative net profit of P1.357 billion in the first quarter, up from same period in 2020 of P1.255 billion.