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B angko Sent ral ng Pi l ipinas 

Central Bank ’s Regulatory Role

over NBFIs:

Mr. Ricardo P. Lirio

Managing Director, SE II

The Philippine Experience

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 Type of Financial Institution Total Head Office Other Offices

I. Banks 7,587 925 6,662Commercial Banks 4,326

44 4,282

Thrift Banks 1,342

100 1,242

Rural and Cooperative Banks

1,919

781 1,138

II. Non-Bank Financial Institutions 9,687 5,243 4,444

A. With Quasi-Banking Functions 31 12 19

Investment Houses 17 7 10

Financing Companies

14 5 9

B. Without Quasi-Banking Functions

9,656

5,231

4,425

Investment Houses 30 26 4

Financing Companies

50 40 10

Investment Companies

9 9

Securities Dealers/Brokers 26 26Lending Investors

9 9

Government NBFIs 2 2

Venture Capital Corporations

9 9

Non-Stock Savings and LoanAssociations

117 85 32

Pawnshops*

9,397

5,018

4,379

Credit Card Companies

7 7

III. Offshore Banking Units 12 11 1

FINANCIAL INSTITUTIONS UNDER BSPSUPERVISION/REGULATION

 As of March 31, 2002

*As of December 31, 2001

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Banks w ith NBFI Subsidiaries/ Affil iates

B angko Sent ral ng Pi l ipinas 

Invest.

House

Financing

Company

Inv.

House

Financing

Company

Securities

Dealers

Credit

Card

 Venture

Capital

Invest.

Company

Bank of the Philippine Islands 1 2 2 3 2

Metrobank 2 1 2 1 1 1

Equitable-PCI Bank 1 2 2 1 1 1

Phil ippine National Bank 1 1 1 1

RCBC 1 1 1 1 1

wi th QB wi thout QB

Name of Bank 

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REGULATORY and SUPERVISORY 

 AUTHORITY 

B angko Sent ral ng Pi l ipinas 

RA 7653

The New Central Bank Act

Supervision and examination of banks and quasi-banks including

their subsidiaries and affiliatesengaged in allied activities

RA 8791

The General Banking Act 2000

Regulation of the organizationand operations of banks, trustentities and for other purposes

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B angko Sent ral ng Pi l ipinas 

Banks NBFIs

DemandDeposits/CheckingAccounts

SavingsDeposits(Passboo

k)Time

Certificate of

Deposits

Deposit

Instruments

Promissory Notes

Repurchase

Agreements

Certificatesof

Participatio

n/Assignment

Deposit-Substitute

Instruments

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B angko Sent ral ng Pi l ipinas 

Non-Bank Financial Institutions

WithoutQuasi-Banking

Function

WithQuasi-BankingFunction

Entity is borrow ing from20 or more persons or

entities

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B angko Sent ral ng Pi l ipinas 

Issuance of deposit

substitutes orborrowinginstruments by anNBFI to 20 or morepersons or entities

irrespective of outstanding

amounts isconsidered

borrow ing from

PUBLIC

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B angko Sent ral ng Pi l ipinas 

NBFIs Regulatory Framework 

1970s Development and growth of NBFIS

REQUIRED GOVERNMENT INTERVENTION

1971Formation of Joint Central Bank of thePhilippines & IMF Banking Survey

Commission

NBFIs should be under theauthority of the Central Bank for

effective administration of credit

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B angko Sent ral ng Pi l ipinas 

NBFIs Regulatory Framework 

1982Rules governing operations of NBFIswere consolidated as Book IV of theManual of Regulations

1980s

Intensified competition amongfinancial institutions

Increased availability of long termfunds through direct and indirectfinancing to increase stability of thefinancial system

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B angko Sent ral ng Pi l ipinas 

1990s

Entry of foreign banks

Entry of foreigninsurance firms

1993

1993

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B angko Sent ral ng Pi l ipinas 

1990s

1997RA 8366

Increasedforeign equityparticipation

and minimumcapitalization

for IHs

RA 8367

NSSLA ACT

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B angko Sent ral ng Pi l ipinas 

Aids in ensuring strong solvencypositions and automatically weeds out

weak players in the industry

1997

INCREASEDCAPITALIZATION

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B angko Sent ral ng Pi l ipinas 

1990s

1998

RA 8556

 “FINANCING COMPANY ACT OF 1998” 

An Act amending RA 5980, as Amended Otherwise Known as the Financing Company Act (1969) 

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B angko Sent ral ng Pi l ipinas 

2000

Issuance of Circulars providing rules andregulations to combat money-laundering

 Anti-Money Laundering B il l

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B angko Sent ral ng Pi l ipinas 

NBFI Governing Law

Quasi-Banks RA 8791 - The General Banking Law

Investment House RA 7653 - The New Central Bank Act

Financing Company

Trust Entities

Investment HouseFinancing Company

Other Trust Entities

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B angko Sent ral ng Pi l ipinas 

NBFI Governing Law

Subsidiaries/ Affiliates of a Bank/QB RA 8791 - The General Banking LawInvestment House w/ o QB RA 7653 - The New Central Bank Act

Financing Company w/ o QB

Investment Companies

Securities Dealers/ BrokersLending Investors

Venture Capital Corporation

Enterprise Wholly or Majority Owned

by a Bank 

Non-Financial Allied Undertaking

Non-Stock Savings and Loan Associations

Pawnshops

TIDCOR 

SBGFC

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B angko Sent ral ng Pi l ipinas 

NBFI Governing Law

Investment House PD 129 The Investment Houses Law

Financing Company RA 8556 Financing Company Act of 1988

Non-Stock Savings and Loan Associations RA 8367 Revised NSSLA Act of 1997

Pawnshops PD 114 Pawnshop Regulation Act

TIDCOR RA 8494 An act further amending

Presidential Decree #1080, as amended,

by reorganizing and renaming the

Philippine Export and Foreign LoanGuarantee Corporation, expanding its

primary purpose

SBGFC RA 6977 Magna Carta for SMEs

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B angko Sent ral ng Pi l ipinas 

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B angko Sent ral ng Pi l ipinas 

Central Bank ’s Regulatory Role

over NBFIs:

Mr. Ricardo P. Lirio

Managing Director, SE II

The Philippine Experience