MANILA - Foreign banks welcomed a bill that would ease restrictions on their activities in the Philippine market, but they said some provisions might block investments.
In a joint statement, four major foreign banks said the bill could generally lead to a more competitive climate and a stronger banking system.
They warned, however, that provisions that would restrict foreign banks' use of capital and require them to maintain the same capital ratios as domestic banks would leave significant barriers.
Bigger Foreign Stakes
The bill, under debate in the Philippine Congress, would let foreign banks hold up to 70% of the equity in a Philippine branch, compared with the 40% now permitted. The legislation is intended to open up the nation's banking sector.
"We believe that the liberalization ... will enhance the ability of the financial sector to mobilize resources in support of more rapid economic development," said the banks' statement.
It was signed by officials in Manila of Citibank, Bank of America, Standard Chartered PLC, and Hongkong and Shanghai Banking Corp.
They said bank reform was a natural outgrowth of the economic liberalizations of the past 18 months.