Central Bank of the Philippines : BSP, PDIC and LBP Jointly Approve SPCB Plus Program

01.03.2014

The respective Boards of the Bangko Sentral ng Pilipinas (BSP), the Philippine Deposit Insurance Corporation (PDIC) and the Land Bank of the Philippines (LBP) have approved the revival of the Strengthening Program for Cooperative Banks (SPCB) with certain amendments and enhancements to promote mergers and consolidations with and acquisition of cooperative banks by stronger partners. Labeled as the Strengthening Program for Cooperative Banks Plus (SPCB Plus), the program which will be available until 17 September 2014 shall replace the original SPCB (Strengthening Program for Cooperative Banks [SPCB] Module II) which expired last 3 August 2012.
The SPCB Plus expands the eligible Strategic Third Party Investor (STPI) or so-called "white knights" to include strong and well-managed rural banks and thrift banks whether or not majority owned by cooperative banks and  commercial banks. This program is envisioned to further strengthen the cooperative banking system, boost confidence in the banking system, and improve the delivery of financial services to the countryside and rural communities.

The SPCB Plus offers a variety of financial and regulatory reliefs and incentives to improve the prospects for success of new banking partnerships.  Financial assistance may be granted by PDIC and LBP to augment capital shortfalls and provide income support to the surviving banks.  BSP has also put on the table a package of regulatory reliefs and branching incentives for the eligible STPIs.

The SPCB Plus expects eligible STPIs not only to sustain and strengthen the financial condition of surviving banks but also to improve their quality of corporate governance and management.  Strong expressions of interest have been received from a number of players in the industry to take part in the SPCB Plus. As of October 2013, 5 applications involving 19 cooperative banks have been received.