First Foreign Bank To Operate In PH Seen To Attract More Investors

President Benigno S. Aquino III on Monday graced the opening of the Manila branch of Japan’s Sumitomo Mitsui Banking Corporation (SMBC), the first foreign bank to operate in the country, which is seen to attract more foreign investors.

“This ceremony represents the beginning of a new chapter of SMBC’s ties with the Philippines, one that cements your position in our local banking industry,” President Aquino said.

The President recalled that it was during his visit to Japan in December 2013 that SMBC suggested the liberalization of the Philippine banking industry, which led to the passage of Republic Act (RA) No. 10641. SMBC is the first foreign bank approved for a Philippine operating license under this new law.

Approved on July 15, 2014, RA 10641 allows the full entry of foreign banks into the Philippines.

President Aquino admitted that the country has some catching up to do compared to its neighboring countries in the ASEAN, in terms of foreign direct investments “likely due to the unstable political and economic atmosphere prior to our administration.”

However, the good news, he said, is that the Philippines “gained momentum in the past five years” for partners such as SMBC.

Japan is the country’s top trading partner with a trade volume of USD 19.15 billion in 2014, and a top source of IPA-approved (Investment Promotion Agency) foreign investments in the same year. According to the President, this is made evident in the sheer number of Japanese firms that have established themselves in the country, such as Toyota, Tsuneishi, and the International Wiring Systems Philippines–a wiring harness company based in Tarlac that is working under the Sumitomo Group.

Furthermore, the Japanese clothing retailer Uniqlo has established 27 out of an initial target of 200 stores in the country.

The opening of SMBC’s Manila branch, Aquino said, would help facilitate the entry of Japanese investors in the country.

“SMBC’s operations in the Philippines will create even more opportunities for all of us. You (SMBC) already have a well-established reputation in Japan; some of your clients may already be eyeing our country for their expansion plans,” he said.

The central bank has approved five other foreign banks to operate in the country under RA 10641. (PRC-PIA/PCOO/PND)