Philippine Central Bank Sets to Increase Capital Requirements for Rural Banks

​The BSP (Bangko Sentral ng Pilipinas) is reportedly set to increase the minimum capital requirement for rural banks to at least PHP 60 million (USD 1.1 million).

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In a draft circular, the BSP proposes to increase the minimum capital requirements for rural banks as part of the RBSP (Rural Bank Strengthening Program) initiative, which was announced last year to enhance the operations, capacity and competitiveness of rural banks.

"A strong capital base enables rural banks to enhance their risk management systems, upgrade resources and manage operational costs, meet prudential standards and accelerate digital transformation," the BSP said in the new circular.

The minimum capital requirement for rural banks will be set at PHP 60 million for those with a head office and only up to five branches; and PHP 200 million for those with more than five branches.

Under the current capital requirements, rural and cooperative banks are required to have a minimum capital of PHP 50 million to P200 million depending on the number of branches in the National Capital Region, as well as between PHP 20 million and PHP 80 million for branches in areas outside NCR.