History of the Philippine Banking

 One bank in 1851 – multi- faceted system which supplies credit to the growing financial
requirements of every sector.
 Spanish Period- create a formal banking in 1851 – OBRAS PIAS
 Obras Pias- organized by father Juan Fernandez de Leon in 1594.
- A religious foundation that accumulated large funds from the legacies of
wealthy individuals etc.
- Funds to these foundations were first invested in loans to traders to finance the
galleon trade in Acapulco, Mexico.
 Galleon trade in Acapulco, Mexico – Spanish sailing vessel that made an annual round
trip one vessel per year) across the pacific between Manila, and Acapulco, Mexico during
1565-1815. They were the sole means of communication between Spain and its
Philippine colony and served as an economic lifetime for the Spaniards in Manila.
 In 1930 Francisco Rodriguez – RODRIGUEZ BANK This institutions
didn’t last long
 Mariano Tuason Family – GORRICHO BANK
 Formal Banking- Banco Espanol – Filipino de Isabel II also known as Bank of the
Philippine Islands.
 BANK OF THE PHILIPPINE ISLANDS – first commercial bank organized in Far East.
 Spanish Time, the country’s first savings bank was establish- Monte de Piedad y caja de
Ahoros de Manila know as MONTE DE PIEDAD SAVINGS BANK by Father Felix
Huertas.
- Spanish rule ended in 1893, the bank placed under exclusive authority of the
Roman Catholic Archbishop of Manila.
 American Period – bank which were already existing were already to continue operation.
 PHILIPPINe NATIONAL BANK was organized in 1916 under Act no. 2612.
 PHILIPPINE BANK OF COMMERCE- the first private commercial bank in the country
owned by Filipinos. Opened for business in 1938, absorbed by Philippine Commercial
and Industrial Bank.
 Outbreak of World War II – Philippines was occupied by the Japanese Imperial Forces
---- three commercial banks were allowed to resume; PNB, BPI, PBC.
 1948- upon the enactment of the RA # 265 or the so called Central Bank Act, the Central
Bank of the Philippines was created. The banking system was made and continue to grow
and expand.
 Congress called for the review of the Banking Laws
 1971- of Nov.- The monetary board created the IMF/ CBP Banking Survey Commission
to conduct an overall review of the Financial Sector of the Economy.
 The Philippine Banking System had become “unnecessary complicated and over-
fragmented.”
 The emergence of new forms of financial intermediation affected the financial resources.
 The Philippine Banking System is still deficient to support the financial requirement of a
growing economy.
  The Commission Recommended that the establishment of new commercial banks must
be stopped, classifications of the banks be reduced so that monetary and fiscal policies
can be equally applied and equal benefits be enjoyed by banks.
 The authority of the Central responsibility must expand over the financial system. The
Central banks power and responsibility must be redefined primarily as the maintenance of
monetary stability in the Philippines.
 These recommendations resulted in the amendments to the General Banking Act, the
Central bank Act, and other pertinent laws contained in Presidential Decrees Nos.
71,72,113 to 123 and 129. Focusing on the structure, operation and growth of the
financial system.
 1979, they make a further study of the Philippine financial system to update the system.
With representatives from the International Monetary Fund and world Bank and was
called the Joint IMF/ WB Mission.
 1972 and also 1980 missions have the objective of maintaining a financial system that
could provide the needs of a growing and developing economy.
 1980 survey shows more particular about a more efficient financial intermediation in of
new and small business enterprises.
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 What is Co-operative Banking - Cooperative banking is retail and commercial banking
organized on a cooperative basis. Cooperative banking institutions take deposits and lend
money in most parts of the world.
Cooperative banking , includes retail banking carried out by credit unions, mutual
savings banks, building societies and cooperatives , as well as commercial banking
services provided by mutual organizations (such as cooperative federations) to
cooperative businesses.
 First Isabela Cooperative Bank, stylized as FICOBank[2], is a cooperative bank started in
the mid-1970s. It is primarily engaged in financial intermediation between and among:
the farmers, fishers and their organizations; the micro, small and medium entrepreneurs;
the rural, urban and overseas workers; and the other groups of financial consumers. It
also provides mobile-money, money-transfer/remittance, cash-dispensing and other fee-
based services to the public. As of June 30, 2019, FICOBank has 36 banking units
located in the provinces of Isabela, Quirino, Nueva Vizcaya, Cagayan, Tarlac, Nueva
Ecija, Bataan, Pampanga, Pangasinan, Bulacan and Kalinga.
 The Philippine Cooperative Program of the ‘70s during the Marcos administration paved
the way for the organization of cooperative banks in the country. A group of technocrats
led by Dr. Orlando J. Sacay, the recognized father of the Philippine cooperative banking
system, worked for the enactment of Presidential Decree 175, espousing the formation of
economic institutions or Cooperatives. Composed of small farmers, these cooperatives
were primarily organized to look after their own interests.
 To serve as foundation of the cooperative rural banks and area marketing
cooperatives, samahang nayon (pre-cooperatives) were organized in the rural areas.
Thus, the triangular approach to rural development—production (under the samahang
nayon), credit (under a cooperative rural bank), and marketing (under an area marketing
cooperative)—was put into operation. It was envisioned that there would be social equity,
if these three vital functions of rural development will be placed in the hands of the
farmers.