BSP launches new program to strengthen rural banks

The Bangko Sentral ng Pilipinas (BSP) has launched a program that aims to strengthen the rural banking industry in recognition of its critical role in providing financial services in rural and agricultural communities.

“The Rural Banking Industry Strengthening Program (RBSP) is part of the BSP’s broader and continuing efforts to boost the resilience of the rural banking industry, which is a key agent of countryside development as it provides financial services to rural communities, including micro, small and medium enterprises,” said BSP Governor Benjamin E. Diokno.

The program will be carried out by the Inter-Agency Working Group (IAWG) on the RBSP. The IAWG is headed by the Steering Committee composed of the BSP, Department of Agriculture, and the Department of Trade and Industry with Monetary Board Member (MBM) V. Bruce J. Tolentino, as chair.

“The BSP pursues the RBSP as we recognize the vital role that rural banks play in the areas of financial inclusion and inclusive economic growth,” according to MBM Tolentino.

The steering committee will be supported by a technical working group (TWG) mandated to formulate an action plan, including the development of a capacity-building program for RBs.

The TWG is chaired by BSP Financial Supervision Sector Deputy Governor Chuchi G. Fonacier, and includes representatives from the Agricultural Credit Policy Council, Land Bank of the Philippines, Development Bank of the Philippines, Securities and Exchange Commission, Philippine Deposit Insurance Corporation, and Rural Bankers Association of the Philippines.

The RBSP also benefits from the expertise of senior advisers who will provide technical guidance in activities requiring research, data collection, analysis, and policy formulation.

The senior advisers include Dr. Mario B. Lamberte of the University of the Philippines Public Administration Research and Extension Services Foundation, Inc. and Dr. Gilberto M. Llanto of the Philippine Institute for Development Studies.

On 1 June 2021, the IAWG held its first meeting to discuss the scope of the program and the steps moving forward. The Steering Committee and TWG will meet regularly over the next months and are expected to submit an initial package of proposed policies, programs and reforms to the Monetary Board by the end of 2021.