A LOCAL business group has concurred on the Senate’s approval of the bill that will allow the expansion of the participation of foreign banks in the Philippine banking industry.

The Cagayan de Oro Chamber of Commerce and Industry, Incorporated (Oro Chamber) said that the law will help strengthen relations between the Philippines and other countries.

Last June 9, 2014, the Senate passed the Senate Bill 2159 or an “Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines.”

Said legislation was approved on third and final reading.

In an article published online in Rappler last June 10, Senator Sergio Osmeña III, the bill’s proponent and chairman of the committee on banks, financial institutions and currencies, said, “[this is] to allow our economy and our people to reap the benefits therefrom.”

Once the proposed bill becomes a law, full foreign ownership of domestic banks will be allowed.

Osmeña said it (SB 2159) permits the entry of “established, reputable, and financially sound foreign banks in the country. The same banking privileges as domestic banks of the same category.”

Oro Chamber president Efren Uy supports the proposed law.

However, he said that competition might add up to the relations existing in bank owners, especially the domestic ones.

“Although there is really nothing wrong with this, competition will really be high among bank owners,” Uy said.

“This has been done before since the government allowed foreign banking in the Philippines. But full ownership is definitely something new. If you remember, this is already part of the Asean Banking Integration Framework which will be implemented by 2020,” he said.

The framework will allow qualified Asean banks to operate within jurisdictions on equal terms as domestic banks but still subjected to prudential and government standards and parameters.

“This will mean that there will be a door for free flow of trade and this will increase our exposure just like what Aboitiz is doing now,” Uy added.

Aboitiz is setting sights on expanding overseas especially on power, a news article from a major daily read.