IN OUR column of July 17, 2018 titled “Implement new monetary policies” we compared the bank to a dam that stores water for the use of the community.
The water from waterfalls, rivers or creeks that flows downstream can be stopped by a dam at the lower level and accumulated in a reservoir. Then the water is being distributed through canals and pipes for various uses such as for irrigation, drinking water or household use, running a mill and generator or hydroelectric power plants, etc.
Like water in the dam, money in banks is accumulated from various sources and later loaned out for the financing needs of the community.
We also cited in the same article the speech delivered by Finance secretary Carlos G. Dominguez III as guest speaker of a banking group “which mentioned of 86 percent of Filipinos remaining unbanked.
“That is an intolerable ratio of the population excluded from the financial mainstream,” he emphasized, “and we aim to reduce this number dramatically over the next few years…”
In the light of the important economic function of banks in the community and the policy objective clearly expressed by our Secretary of Finance, we cannot understand why the Monetary Board of Bangko Sentral continue to close banks presumably for violating banking rules instead of assisting them rehabilitate their financial condition, if deficient.
In this connection, we were surprised to read a news item published on Aug. 2, 2018 that the Monetary Board ordered the closure of Bangko Buena Consolidated, Inc. with main office on its own building on J. Rizal St., Iloilo City.
Founded in 1971, the bank has set up branches in Bacolod City, Negros Occidental; Barotac Nuevo and in Lambunao in Iloilo province; Buenavista, Guimaras; Culasi and Pandan, Antique; and Dao, Capiz. It had 9,845 deposit accounts with total deposit liabilities of P271.8 million as of end of March, 2018.
Bangko Buena is among the bigger rural banks in the country. It has expanded and operated for 47 years. Why should Bangko Sentral shutter such a bank instead of rehabilitating it?
Since the administration of Bangko Sentral Gov. Nestor A. Espenilla Jr. on July 3, 2017, the following banks have been closed by the central bank, placed under receivership and now administered by thePhilippine Deposit Insurance Corp.:
1) World Partner’s Bank (A Thrift Bank), Inc. – 9/10/17
2) Cabanatuan City Rural Bank, Inc. – 10/11/17
3) Rural Bank of Loreto (Surigao del Norte), Inc. – 2/23/18
4) Empire Rural Bank, Inc. – 3/7/18
5) Rural Bank of Initao (Misamis Oriental), Inc. – 5/18/18
6) Women’s Rural Bank, Inc. – 7/25/18
7) Bangko Buena Consolidated, Inc. – 8/2/18.
We wish that Finance secretary Dominguez will take this opportunity to look into bank closures, as well as on the overall operation and supervision of financial institutions by Bangko Sentral ng Pilipinas if we must succeed in including more Filipinos in the financial mainstream according to what he desires.
***
Historical Quote of the Week
“The first Filipino Doctor in Anthropology – F. Landa Deocamo of Iloilo.” (For comments or re-actions, please e-mail to jnoveracompany@yahoo.com)/PN
