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    History of Banks

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    heleana margarette laplana
    The first organized credit institutions in the Philippines were Obras Pias, charitable foundations established during the Spanish colonial era in the 16th century. During the American colonial period in the early 1900s, banks from the US started establishing local branches. The Philippine National Bank was established in 1916 with the Philippine government as the majority stockholder to break the foreign banking monopoly and increase access to credit. Throughout the 1900s, both foreign and domestic banks operated in the Philippines, with periods of disruption during World War 2 when only Filipino and Japanese owned banks were allowed to operate.

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    History of Banks

    Uploaded by

    heleana margarette laplana
    21 views2 pages
    The first organized credit institutions in the Philippines were Obras Pias, charitable foundations established during the Spanish colonial era in the 16th century. During the American colonial period in the early 1900s, banks from the US started establishing local branches. The Philippine National Bank was established in 1916 with the Philippine government as the majority stockholder to break the foreign banking monopoly and increase access to credit. Throughout the 1900s, both foreign and domestic banks operated in the Philippines, with periods of disruption during World War 2 when only Filipino and Japanese owned banks were allowed to operate.

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    The first organized credit institutions in the Philippines were Obras Pias, charitable foundations established during the Spanish colonial era in the 16th century. During the American colonial period in the early 1900s, banks from the US started establishing local branches. The Philippine National Bank was established in 1916 with the Philippine government as the majority stockholder to break the foreign banking monopoly and increase access to credit. Throughout the 1900s, both foreign and domestic banks operated in the Philippines, with periods of disruption during World War 2 when only Filipino and Japanese owned banks were allowed to operate.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    21 views2 pages

    History of Banks

    Uploaded by

    heleana margarette laplana
    The first organized credit institutions in the Philippines were Obras Pias, charitable foundations established during the Spanish colonial era in the 16th century. During the American colonial period in the early 1900s, banks from the US started establishing local branches. The Philippine National Bank was established in 1916 with the Philippine government as the majority stockholder to break the foreign banking monopoly and increase access to credit. Throughout the 1900s, both foreign and domestic banks operated in the Philippines, with periods of disruption during World War 2 when only Filipino and Japanese owned banks were allowed to operate.

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    © All Rights Reserved
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    History of Banks

    > The first organized credit institutions were established in the Philippines during the 16th century
    Spanish colonial era. These were the OBRAS PIAS

     Obras Pias was a charitable foundation during the Spanish period. The word itself means works
    of piety in Spanish. The Church directed a share of personal fortunes to its charities such as the
    Obras Pias. Donors had specified that the funds are to be used for charitable, religious and
    educational purposes. However, some of the funds were managed by confraternities that
    invested capital in secular activities like underwriting cargoes for the galleon trade.
     In 1869, the opening of the Suez Canal facilitated trade between the Philippines and Europe. The
    Philippines then attracted British capital, and in the years that followed, the Chartered Bank of
    India, Australia, and China (now known as the Standard Chartered Bank) and the Hong Kong and
    Shanghai Banking Corporation (HSBC), both British-owned banks, opened their branches in
    Manila
     By the end of the Spanish regime, the banks in existence were: El Banco Español Filipino de
    Isabel II (now the Bank of Philippine Islands or BPI) which was given the sole mandate under a
    Spanish Royal Decree of 1854 to issue banknotes called Pesos Fuertes; the Chartered Bank of
    India, a branch of the HSBC; the Monte de Piedad; and the Banco Peninsular Ultamarino de
    Madri
     During the American colonial period, banks from the USA started to establish local branches that
    would cater to growing American economic interests and capital inflow into the country.
     The American Bank was first to open a branch in 1901. However, it was placed under
    receivership by the Insular Treasurer for making doubtful loans after only 4 years of operations
     In 1916, the Philippine National Bank was established with the Philippine Government as the
    majority stockholder. This is to break the foreign banking monopoly and remedy the lack of
    credit facilities
     The PNB was meant to function as a government enterprise that would widen the variety of
    banking services “beyond trade finance in exportation and importation, money changing of
    foreign currency, and fund transfers, all of which , while useful in the short term, failed to
    mobilize capital in the development of natural resources.
     It’s charter at that time empowered PNB to issue bank notes and act as a depository of
    government funds
     At the turn of the 20th century, the Americans established the Guaranty Trust Corporation (GTC)
    and International Banking Corporation (IBC). The existence of GTC was short-lived, while IBC was
    eventually taken over by the National City Bank of New York (now known as Citibank)
     In 1918, the Manila branch of the Yokohama Specie Bank was given license to do business in the
    Philippines
     Between 1935 to 1946, more foreign bank branches were established in the Philippines. These
    include the Bank of Taiwan, and the Nederlandsche Indische Handelsbanks
     In 1939, the government created the Agricultural and Industrial Bank to absorb the functions of
    the National Loan and Investment Board and to harness government resources
     The Philippine Bank of Communications is the first bank with genuine Filipino private capital.
    However, it was temporarily closed at the outbreak of WWII.
     Only Filipino-owned and Japanese banks were allowed to operate during WWII; The Chartered
    Bank of India, Australia, and China, HSBC, and the National City Bank of New York were all
    treated as enemy properties and placed under liquidation by the Japanese Military Government
     On the other hand, the Nampo Kaihatsu Kinko (Southern Development Bank) opened a Manila
    branch in 1942 and acted as the Japanese government’s fiscal agent in the Philippines.
     After the liberation, all domestic banks that operated during the Japanese occupation were
    unable to reopen because the greater part of their assets consisted of worthless Japanese war
    notes, bonds, and obligations of the Japanese-sponsored republic, and balances with Japanese
    banks
     In 1947, a branch of the Bank of America was allowed to establish a branch in Manila and in the
    following year, it absorbed the assets and liabilities of the local branch of the Nederlandsche
    Indische Handelsbanks
     In 1952, the Rural Bank Act was enacted and two years later, the Agricultural and Industrial Bank
    merged with the Reconstruction and Rehabilitation Fund to form the Development Bank of the
    Philippines

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