The country’s financial regulators have agreed to streamline their procedures governing mergers and acquisitions in the local banking industry in a bid to expedite the process of consolidation among financial institutions.
Initiated by the Philippine Deposit Insurance Corporation, the multi-agency project, which is the first of its kind among financial regulators, aims to harmonize the requirements and synchronize the timelines in the processing of merger proposals of banks.
The regulators agreed on a harmonized list of requirements for merger proposals of banks, effectively cutting in half the number of documentary requirements from 58 to only 30.
The synchronized timelines and the elimination of duplicate functions among the concerned agencies will also significantly reduce the total processing time of merger proposals from an average of about 160 business days to only 55.
Apart from the PDIC, the agencies that have bound themselves to this course of action are the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority and the Philippine Competition Commission. The agreement was signed last week.
The Memorandum of Agreement on the Procedures for Applications for Mergers, Consolidations, and Acquisition of Banks is the culmination of the MCA Project, which is a collaboration of financial regulators involved in the processing of MCA proposals of banks.
The project, which is in support of the government’s thrust of promoting ease of doing business, was commended by the Anti-Red Tape Authority in March 2020.
The agreement was signed by BSP Governor Benjamin Diokno, PDIC President and CEO Roberto Tan, SEC Chair Emilio Aquino, CDA Chair Joseph Encabo and PCC Chair Arsenio Balisacan in a virtual ceremony.
The implementing guidelines on the procedures for merger applications will subsequently be issued via a joint circular by the partner-agencies.
