The country’s biggest banks want the incoming administration to further strengthen the industry’s regional competitiveness and financial inclusion efforts, and to combat cyber-related crimes with all of government resources.
Philippines’ largest lender, SM Group’s BDO Unibank Inc., would like to fight with more tooth and claw to fend off fraudsters and cybersecurity hackers, and is asking whomever wins after the May 9 national elections to look after the banking system.
"There are a few things that they (new government) may want to look at but it may be a combination of legislation and regulatory policy. Number one is we need to be tighter on cyber crimes, we need to make sure that we do our part in preventing or discouraging the perpetrators from committing cyber crimes,” according to Nestor V. Tan, BDO president and CEO, and former president of the Bankers Association of the Philippines.
Tan said the next administration should also consider banks’ moral hazard impact to the public, versus other non-banks – most are not regulated - that are also crucial in providing financial services to consumers.
“Right now, banks are extremely regulated and rightfully so, because we pose a moral hazard to our depositors and our borrowers. However, there’s a proliferation of financial service providers that are outside of these regulatory ambit so for the health of the industry and for public policy, they should look at how these entities should be managed relative to banks,” said Tan.
The BDO chief is also recommending that the next president of the Philippines to “revisit” the banking industry in general and how it could compete in the ASEAN regional trade bloc. “We are relatively small, relative to the ASEAN. And, one of the things we may want to look at is are we able to compete regionally,” he said.
Bank of the Philippine Islands (BPI) President and CEO, Jose Teodoro “TG” K. Limcauco, for his part, is focusing on financial inclusion.
“My recommendation to the incoming administration is to really continue what the BSP (Bangko Sentral ng Pilipinas) has been pushing which is financial inclusivity,” said Limcauco.
Limcauco wants the new government to “really push forward to make sure that people have access to the financial system and that’s either in two ways -- increasing the ability to make payments digitally and second, to push forward and roll out the national ID.”
The BSP has updated the National Strategy for Financial Inclusion for 2022 until 2028. The next six-year financial inclusion blueprint mainly focuses on micro, small and medium enterprises, start-ups, and agriculture financing. The MSME sector with 63 percent of total employment is a major source of livelihood for a large population of Filipinos.
There are 10 candidates vying to be the Philippines’ 17th president of the republic. Based on polls conducted by Pulse Asia and the Social Weather Stations, the top three candidates in the running are: the son of a former dictator, Ferdinand “Bongbong” Marcos Jr.; the incumbent Vice President of the Philippines, Ma. Leonor “Leni” Robredo; and a far third is Mayor Francisco “Isko” Domagoso of Manila.
The business community, including local and foreign economists such as Nomura Global Research, said the most market-friendly candidate is Robredo due to her unblemished public service record, while a Marcos presidency could turn off foreign investors. The Marcoses, particularly Marcos Jr., are facing various legal cases plus a tax evasion conviction, while former first lady Imelda Marcos has also been convicted of graft and other corruption cases in 2018.
In an economic forum hosted by Security Bank Corp. on Thursday, April 28, Dr. Cielito Habito, economics professor at Ateneo de Manila University, said the most influential presidential candidate when it comes to economic impact, is Robredo.
For Akihiro Sato, the chief economist for MUFG Bank Ltd., it may be Marcos but he admits he is “not an expert in Philippine politics or economy” and does not know enough background and data to offer an explanation if whether or not Marcos will have a positive impact on the economy, if he wins.
Habito, a former socioeconomic secretary, said a Robredo presidency is generating more business confidence versus a Marcos one.
“In this particular election (on May 9) the sense we are getting is that there is a lot of uncertainty behind what might be a Marcos presidency but there seems to be a lot better expressed confidence in a Robredo presidency (in the) business sector. To that extent, and it’s true that there will be better business confidence on a Robredo (government), I would actually expect better economic outlook prospects under a Robredo presidency,” said Habito in the forum.
“In the end, what matters a lot is business confidence,” he added. “We saw this happen upon the election of President Benigno Aquino III in 2010. We came from a stagnant investment (environment) and we suddenly saw investment growing double-digits after his election. So that clearly was because of business confidence,” said Habito, citing similarities of what is to be expected when Robredo wins.