STROLL DOWN AYALA Avenue, Manila’s financial strip, and witness an over-banked market. Every wealthy Filipino family seems to own a bank of some description. Some are so marginal that bigger competitors remain genuinely stumped as to what business they actually transact.
According to Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, the country still bears 879 lenders, including commercial and universal banks, and thrifts and co-operatives, transacting business from a staggering 6,709 branches.
The market used to be even more overcrowded: a trickle of mergers over recent years has eliminated some of the smaller players. Yet despite the compelling business logic of consolidation, the Philippines has not witnessed the sort of wholesale bank sector restructuring that occurred in Thailand, Korea and Indonesia. The absence of an IMF bailout, the price of which was reform of domestic banks, meant that the system muddled through...
