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MONEY is
pouring into the countryside, encouraged by regulatory
incentives and commerce, the Bangko Sentral ng Pilipinas
(BSP) said on Wednesday.
In an
interview, deputy BSP Governor Nestor Espenilla Jr. said
this was evident in the sale of sub-debt notes by a
number of rural banks that intend to ride the tide of
expansion outside Metro Manila.
“The
rural banks are selling Tier 2 notes to enable them to
expand. Much of it is snapped up by the Land Bank of the
Philippines but it is a very good start,” he said.
Espenilla said right now private equity groups do not
take to the Tier 2 notes sold by rural-based lenders.
“This is
just the start. Down the road, as they become more
familiar to the investors, they will be tapping their
potential,” he said.
He said
the rural institutions that sold Tier 2 notes were “some
of the most innovative” in the banking business.
An
example of a rural bank that embarked on an expansion
program along these lines is Producers Rural Banking
Corp., which has 39 branches in Central Luzon.
Tier 2
notes, as a source of funds, allow banks to expand their
capital base without having to ask shareholders for
fresh equity.
LandBank
president Gilda Pico has set aside resources
specifically for this purpose as part of the commitment
to transform areas outside Metro Manila into centers of
commerce and growth.
Pico
said domestic fund managers have shunned the Tier 2
notes of rural banks in recent months but does not doubt
this will soon change.
Espenilla said LandBank is still the “primary source of
Tier 2 capital” for rural banks and lauded Pico for
helping the countryside get much-needed financing. |
