TFIE RURAL BH_IKING SYSTEM: NEED FOR by t_.o P_P,
I
r
I
I
I
B. Z,m_em'ee'e _
!qO. 85-08
I
*Researoh Fellow, Philippine Institute for Development Studies (PIDS)째 The author is grateful to MS. VANGIE Y0 for hOE able research assistance, and MS. EMMA PI_RO-C_NCO. for lRalnstaklngly typing this draft. Paper presented during the Sixth National Credit Workshop, June 20-22, 1985, Development Philippines, Tagaytay City.
A_Ei=ultural _ademy of th_
The views expressed in this paper are those of the author. and do not necessarily reflect those of the Institute.
THE
I•
RURAL
BANKING'
SYSTEM:
rural
banking
system.
_NEED
FOR
REFORMS
Zntroductlon
The network
in
the
proviOing Wi_h
rural
the
a
wellT
aurrentl_ rind
rural•
banking
survival°
is
they
the
in
of
19B3.
middle
viability policy
of which
re lated
most
redis count
rediscounting further
aggravated
Several Under rural
an
questions entirely
banks on
measures
should
competitive
_he
its
new
Own
policy
history
struck
seriously
affected
subJequent _he
use
sha rp of
tax
the
mist of
in
merket-
redu orion exe_ptlons,
taken
and
assure
come
policy
ro_e
be
environment?
for
the
in has
p£oblems.
agricultural
system
however,
's post_war
immediately
a
the
development
to
others,
different
have
.emphasis
banking
their
system,
fighting
The
withdrawal
services.
crisis
taxes,
and
in
ecOnomia
has
among
role
an
banks.
includes,
big
agricultural
1980,
It
extensive
financial
adjusting
country
rural
a
banking
currently
in
in
plays
Unfortunately,
were
initiate0
unpre=edented the
on
obstacles.
While
environment
rural
emphasis
•system
has
sector
functioning
few
which
certainly
agricultural
renewed
should
areas
(RBS)
to
play
in
mind.
If
under
do
.renewed
this
rehabilitate
itssurvival
our
envir0_ment,
development? to
to
so, the this
what • rural new
-
This
paper
The
next
s•ecti_
and.
performance
ZTI
disausses
competitive to
Review
of
aural,
roles The and
the
may
areas
_ailed
of
banks
provided
aa
to
and
Performance
be
considered
Section under
•this
presents
some
the
RBSo
_.he
of
may
not
in
efforts
It
operate
permanent
features
at and.
at the
profitably, and
in
that
the
have
their
iwide c_Id
same
time,
pSy cholOgica initial the
stage
subsidies
timeframe had
considered operatiC_1o
1
government
indirect no
to
located
.fairly
subsidies
_anks
access
countryside
and,
direct
rural,
primarily
areas
The
the
Since
these,
•S4pp!y
institutions
is, noteworthy of
Thus..
rural
expectational
substantial
I) °
the
as was
Creation
provide.
banks
savings
withdrawal
-stipulated.
in
entrepreneurs.•"
them
Table
sect ion
financial
rural,
"favorable on
rural
folks which
people's
effects
RBS
strengthen
well
services
distribution
generate
system.
the
last
Their
provide
urban
enhance
of
policies
System
institutions. to
questions.
finanQial
banking
Policies.
banks
•financial
them
rural
• possible
sankin •
intended
the
important
the
Financial
leading
(see
reviews of
those
addresses
rehabilitate
Rural
in
basically
environment.
measures
ZI°
2 -
for been
_m_st
of
-
.Rural pla.oe,
.Banks they
Ehe-refOre,
were
are
serving.
tO
small
made
_o
Secondly,
dedi=eted
to
mer_hanEs
and
invesEmsnts
to
on
50
agricultural small do
not
tend
to
exceed
of
enterprises
reward
small
they
to
lend
only
land
or
less
to
small
whose And
banks
growth area
and
Pio0.O00o
first
the
permitted
hectares
_he
Their
of
production
business
In
-
growth
were
have
small.
banks.
the
they
who
be
unit
•depend
farmers
policies
designed
were
has
3-
and
capital
lastly,
tax
penalize
big
banks. The 70S
low
was
rural
interest 8avlng,
rural
loana ble to
At
policy
had
as
The
introdu
se_d
half
of
the
agriou_tural
to
the
60s
credit
operate
credit
informal orion
served
a
to
the
background. to
take.
the
farmers Sinue
and
the
low
disincenEive
with
to lJ.m.i, ted
severely therefore,
still
market°
oT
new
farm
and
,the
70s
policy
the
demands,
credit
up
investment.
small ".
had
50s
have
"loansharks
Unmet
the
to
they
protecting
banks
to
put
that
the
faring
from
funds.
go
from stimu
thus
means
of
rate
at
was
banks,
entrepreneurs
policy
aimed
mobili&ation
responsibility
had
rate
primarily
Savings For
interest
ot
technology
in
substantially government
the
altered from
_e
of
I
merely
protecting
small
_armers
into
agricu
ltural
output.
Aside
ab_t
the
technology
, additional
new
from
one
of
in'=reasing
a_uiring
knowledge
working
¢ap italwas
-
needed
so
technology.
that
farmers
can
Since
small
farmers
their
farm
savings
little working
from
,capital
Instead
of
meeting
new
has
leaving credit
by
taxing
l_rtly
by
_rrowing
has
technology,
output
o
attractive which
on
make by
_
from
Bank bank
the
for
especia11짜 proliferation
the
vigorously each
adoption
making
banks
town. of
new
There
is
completely With
are
One
the of
small
ones.
This
lending
even
new
It_ ra 1 the
rates and
dependent 700,
more
the
hav_ng
objective.s
a
_as
to
widespread
more
resulted in
_f
cost
of
has
this
relatively
policy
to
as
changed
the
technology
accessible
made
agricu
In
the
and
that
increasingly Bank.
pursued
banks
717),
_he and
the
creation,
administrative
credit
rural
mast
adoptico
has
rediscount
to
doubt
rapid
time
relatively
banks no
of
savings
P.D.
increased
Central
task
money
hence,
became
market.
long
a
_ried
(e.g.
cheap
of
additional
were
rural
farm
only
_he
take
The
to cover
reali:e
increased
has
the
farm
credit
through
banks.
between
rural
borrowings
central rural
rural
supposed
risk
banks
could
to
it
spread is
credit
funds.
and
ot
rural
banks
abroad.
However,
character
the
partly
contributed
farm
from
Bank
new
l_e
deposits
commercial
_heee
the
usually
_hrough
on
demand
pertly
policy
the
Central
credit
of
to
rates
u_ttractivev_the
conduits
come
adopt
income_
admittedly
interest
increased
tO
demands
mobilip-ationv_wnich since
4 -
marginal
farmers, An
the areas
- 5 -
where
it
w£thou_
is
£mpossible
substantial
•The
1960
efficiency which
_h@
from
Central to
adopt
Central
ban_
Bank
preferred funOs
snd
to
_a_her
surplus
than
_nd
in
t_8_
_hei_
agrlo_
l_u_al
sector
rediscoun_in% T_e
crisis
_orrowe_s
were
The
switch
re(}uo_ion
Cen_rs1 are
_een
en_Oy
of
_he
they
Central
_ank
_o
between pro%i_
_nderst6n_able
ds_ive_ ly
0%
ls
same
Hence,
view _
the
encourage_,
intermedis_i_
l_g_e
bankin_
economi=
were
in
o_edlt
depends
_O
t_e CB'
o_
pol_c¥.
rural
_urn
oompetltive
Lo
in
are
tir_nciai
conduits
_ctivity.
a D_l_y
Dorrowin_&
real
support.
units
this
a
continued
as
_v•ing_
_han
has
intermediaries deficit
oppor%_ni_ies _hen
s_ill
co_qpetltio_
institutions
be
build_up
support,
removed.
of to
_n_.
emphasi_e0 to
rather
_nks
malnly
Bank
have
finanolal
9over_men_
remain
Central
been
posture
capital
rural
have
All
rural
rural
Barriers
stressed
._he
For
environment,
However,
J_
Bank.
•intermed.iary. new
i_posed to
viable
reforms
competitlon.
has
expected
a
and
financial
legally
moDilizetioo
have
9overnment
_rough
were•
to
_h_t un_Dle
piling to
VOI_
and
ms_:l_e_ surprises
An repa_
sudde_
fated Of
t_dl,
y
198_. _hei_
_r_e_ra_es
_rke_v_e
in_he
B_nk,
st_k to
up
w_S
system
_%_@=t, eO A
io_
Ioa_s,
wi_h
_;he
_he_
i:_
_an_
r_,
s_> wl_h
o_ ._x _J,_y
_]_ the_._
Ce_al
_e_iSoo_n_iIl_
_ha_; we_'e not;
o_ and
r_disGoun_
_i_nO_l
_
._:t_,@
_x_t_£o_
an_,oip_'_ed
1_7
- 6
rural
banks.
would
A0justments
certainly
predicted
and
be
it
data
aDout
some banking
is
system.
Star_ing
in
CB
intensified sector that
This
further
through deposits
indicating savings
per
rural
the in
success
the
per
floating
interest of
since
surplus
rates
in
the
significantly regime
compared of
themselves
in
however,
CB
Dorrowings
for
rural
banks.
the
rate
to
to
the
the an
_uring
the
previous
e_orts
o_
increasingly that
still
even
may
constituted
rates
per
were
the
bank
the
growth also
interest This
banMs
to
may
rate De
one
position
environment.
financial
a major
the
countryside The
years.
i;_
indicate
the
float_.ng
CB
Note
during
competitive a_ter
the
incentives.
rural
more
mobilizing
higher
accounts
fun4s.
increasing, in
in
o_
agricultural
growth
This
to
rural
re_
when
been
The
respond
of
to
time
banks
savings
the
to
window.
have
regime.
refer
sources
the
particularly
capital
of
source
the
were
banks.
to
tended
at
rural
they
system's
RB8
Dank
mobilizing units
rural
re0iscounting
of
were
higher
indication
Note,
Dank
the
main
countryside.
deposits
potentials
their
support
various
if
point
the
occurred
its
than
this
gives be
its
environment
performance
however,
borrowings.
by
at
II to
policy
difficult
financial
used
1974,
new
discounted
Table
Deposits
this
worthwhile
the
_unds.
on
to
•more
properly
Perhaps
-
source
reforms, of
funds
- 7 -
The
performance
increasing those
its
of
other
banking
has
The
rural
system
borrowings
is
commerciai The
and
those
been
Its
ROI
(7.8%)
it
1984
(5.2%),
the
banking
system
(10.4%).
respect anO
the
coul_
be
government The
System
1985
financial
will
likely of
arrearages
with
unprecedented
the levels
outstanding
had
bleaker lending
Central
to
years
(see higher
systems. of
than
should
the
the
had
that
the
CB
system few
of
on
V).
banking
It
the
of
Table
lower
of
the
that
ot
however RBS
in
De this
substantial
the
because
rural of
activities. Bank
constituting
rediscounts
of
CE
received.
performance De
their
but
mainly it
that
than
performance
attributed
subsidies
reduction
their
favorable
Table
consis_enly
higher
system
that
(see
reliance
past
thrift
banking
noted
in
banking
been
and
was
successful
(see
the
commercial thrift
Its
rural
had
rural
banking
deposits
than
over
co_r_nercial in
total
systems
the
with
of
the
least
conspicuous
o_
share
institutions in
o_
comparison
of
shrinking.
banking
terms
XII).
the
deposits
declining
the
is
in
The
Table
banking
However, ot
in
resources
(see
its
profitability
_han
total
among
thrift
VI).
pales
system
•more
consistently
Table
the
has
system
institutions.
banking
of
banking
resources
declining
share
banking
baen
in
savings
The
rural
banking
been
mobilizing IV).
total
system
system
of
(see
Table
substantial In
already about
banking
72
1984,
reached
at
percent
of
VII).
They
-
will
probably
have
operations,
and
constitute their severe
.III.
ReneweO Role
Rural
on
assume However,
the
Banking
loans
usually
loan
will
f low
lending
portfolio,
certainly
of
nave
credit
to
th_
• one.
used
be
to
agricultural
O_
both
the
on
role
agricultural
framework,
freely
Glow
into
it
the
are
credit
credit
policies
focus
on
the
the
hoped
sector
this
economic
accompanied
policies.
were use
of
,
the
monetary
inputs phased
in
view
will out.
resources
would of
the
changes
in
activity. with
Whereas
stressed
approach Prices
_actor
that
the sector
current
be
the
from
market,oriented. and
will
stimulate
agricultural the
is
recovery.
differs
agricultural of
to
subsidies is
sector
•economic
adopted
is
and
reforms and
the
•products
attractiveness
These
in
subsidies,
development
this
agricultural
before,
deregulated
the
development
the
substantially
with
Under
agricultural
approach
Whereas
pampered
and
System
that
sector
previous
fully
belie_
current
agricultural
monetary
their
their
Agricultura_l_Develop_ment
leading
the
relative
o_
operations
emphasis
the
the
to
agricultural
on
on
renewed
anchored
down
sector.
the
ot
scale
percent
lending
.Emphasis
The
be
80
consequences
agricultural
to
since
about
reduced
8 -
before
recent
selective
policy
instruments
will for
-
stabilization woul_ to
purposes.
still
other
the
flow
on
their Bank
in
market,
rural
banks'
the
countryside on
their
selfvfinanceO most
proOuctive The
is the
the
is
offering
De
to
real
surplus
investment
and
to
the
operations
i.e. remain
themselves
intermediary, saving
units
would
from
financial
stimulate
they
woul_
To
financial
than
ot
important.
a
in
highez
realize
allocate
would
Their •assure
to
through
funds
of
their
to
the
continuous and
their
the
areas
economic
borrowers
would
allow
them o£
to
make
prospective
agricu
where
they
regarding
of a
in
flow
activities
characters
banks
familiarity
stock ••of @information
various
return
the
rural
distribution
agriculture
in
personal
and
of
wide
Moreover,
conditions
and
risk
banks
revenue,
into
role
and
the
funds
main
locality
o_
of
transform
other
funds
economic
potentials
to
any
activities.
operating
by
eventually
rural
savings
side
intermediated related
as
activities,
very
country
well
dictated
rediscounting.
•Like
continuation
indeed
as
be
will
source
CB
by
will
framework,
have
o_
intermediaries.
flow
credit
rate.
through
they
Bank
sector
rate
market
suDsidies
the
the
important
conduits
return
time
policy
most
Central
agricultural
rediscounting
new
Central
mere
the
prevailing
this
the
Although
this
The
the
Under lose
into
sectors,
market.
based
9 -
better economic
in
o_
Iture ,with are the the
prospective assessment projects.
-
In
this
case,
the
risk
of
loans
social
of
will
be
less
financial The
up The
of
in
the
worthwhile
this
than
in
financial the
area
cost true
the
rural
institutions where
except
the
their
existing
enter
on
overestimate
hence,
higher
the
agriculture
the informal
roles
new
they
explore
Rural
no
other
rural
bank.
=redit
would
credit
big
have
some
of
may
be
market
the
important
since
compete
with
especially
Rural
banks financial
banks
may
fully
may
(e.g.,
possible
loan
of
a
to
a
In
bank its
is
That
small
and
very to
institutions,
competing
in
this
ability
directly
specialize
be
locality
banks.
rice
may
with
commercial
institutions.
kind
relationships.
marke_s.
rural
to
financial It
in
financial
be
the
competing
determines
not
on
banks.
and
of
have
other
directly
other
opt
with
the
it
branches
other
clients
size
will
Oepends
institutions
the deposit
regard,
banks
commercial
financial in
rural
environment would
banks
other
that
policy
notably
both
to
slack.
specific
to
be
operate,
unless
institutions,
(2)
to
tend
projects_
other
consequences
felt,
not
currently
operate,
relationship
(i }
banks
institutions
be
would
not
inclined
aOverse
likely
play
likely
to
-
desirable
If
ceased
will
banks
socially
cost.
areas
picks
rural
10
is,
servicing corn
with rural small
farmers),
-
while
Dranches
to
the
needs
banana
planters
course,
banks
so
same
For
ba_ks
to
act
as
at
banks in
•(4)
to
their
Rural
local
can if
Of
is augment
and
commercial
participate 40
are be
rural
turna
worked
funds
flow
to
funds
they
have
onr
commercial
rural lot
may
relatively
in
institutions,
the
have
banks
Thust
a
in
not as
at
latter,
while
a
temporary,
banks
could
that
case,
or
they
borrowers.
There•
perform
penetration
rural
_inancial
own
rural
wholesalers
banks of
act
wo_kin_
out
between
Dut
what
the
is rural
mobilized
locality.
banks
8uDsidiaries regard,
•
may
commercial
The
that
important
and
should
this
permanent
example,
arrangements two
Tn
market
retailers.
the
banks
even
rates.
them
region
advantage
latter
extensive
deposits
lend
as
the
credit
attractive
cater
sugar
same
commercial
between
that
banks. place
the
either
forged
agriculture the
in
may
(e0g.,
functions.
tievup, De
clients
and
comp le mentary
may
big
banks
choice.
banks
formal
commercial
comparative
their
Rural
of
)
their
dictate
(3)
of
11-
may o_
UCPB'
s
become
commercial experience
branches banks. may
or In
be
this worth
.
mentioning. banks of
It
and
P145
from
four
has
in
increasing
the
by
local
managers,
about
local
those in
Some
their
base rural
the
are and
.
bank'
bank
skills
of
information
personal
characters
and
the
increased
together
banks
s
owners
of
blended
thrift
these
of
additional
and
clients,
total
int r odu ced
local
stock
conditions
potential
capital
the
a
of
management the
Thus,
rural
Aside
base
also
the
16
capital".
capital
training
managers.
of
IV.
in
some
nationwide
has
professionalism
and
Danks
in
additional
UCPB
resources
"infused
thrift
million
banks,
12-
truly
to
make
competltive
countryside.
Suggestions
for
Rehabi!itatinglthe
Rura!
Bankinq
SY stem
The possible
discussions "
roles
of
rural
the
flow
of
increasing sector present
under
for
Because
Of
concentration other
the
new
predicament
hindrance
above
banking
their of
to
credit
play
their
institutions
in to
the
banks
such
are
is
the
indeed in
in in
or
agricultural
big
future. an_
urban no
a
the
network
operations
the
However,
roles
limited
out
maintaining
framework.
rural
very
pointed
banks
policy of
them
have
the
centers,
position
to
- •13 -
substitute is,
the
therefore,
banking
policy
and
for
Restructurin_
According
to
to
proposed a
to
should
view
the
of
rural to
be
for
restructuring
include _ar_agement;
deposit required (e)
minimum
potentials
the some
total of
on
potentials net for
the
payment
The
;
worth
broadening
to
the would of
of
loan
set
of banks
snoulc_
of
(c)
(d)
fulfillment
risk
assets capital
the
criteria
potentials
operating;
in
arrearage8
integrity
the
help
strengthen
individual
output
be
However,
to
. (a)
is
can
which
restructuring
bank
Central.
To
seriously.
agricultural
in
environment,
selectively.
rural
the
scheme,
of
o_
participate
borrowers.
government the
percent
arrearages
considered of
80
of
policy
followinq_
• growth
to
system.
with
arrearages
the
_rurai
are
arrears
moratorium
be
(b)
where
the
banking
.cannot
restructuring
applied
the
It
smoothly
.about
loans new
system,
has
area•
the
policy
banking
to
percent
fiveyyear
principal
future.
following
the
banks
defaulted,
lOyyear
include
adjust
The
due
(80)
ad just
to
a. TBAC- study,
programs
attributed
near
rehabilitate
them
rural
Eighty
banks
allow
the
Arreara_es
operating
Bank.
in
to
rehabilitating
of
government
.. even
environment.
suggestions
total
banks
necessary
system
Dew
(I)
rural
ratio; base.
bank of
th_
banks of
the and
_
-
privilege
should,
15
-
however,
be
withdrawn
after
a certain
period.
(3)
Broadenin_
the•Capital
Broadening be
encouraged.
three,
a)
the
not
capital
It
mutually
Internal shows
Base
may
eagerness
the
crisis
may
not
slgns. want
banks. of
One
tax
profits
•which
exemptions
may
ceiling
on
rural
reason has
shares. capitalization
been
phase
by
is
In
that
provides
view of
rural
Our
profits. 20
increase
order
tax
increase
percent
disincentive
need in
the
stoekholdihg
to
the
banks
back.
the
a want
ot
bank
back
group
might
reduced
to
ploughing
their
withdrawal
out
_ners
owners
to
the
'a
some
bank
ploughed
bank
reason
who
why
that
De
shows
capital
is
after
not
still
consistently
have
study increase
may
reasons
individual/family
stockholders
least
operation
This it
are
encourage
bank
at
to
continue
gradually
possible
should
TBAC
owners
additional
capitalization
Another
a
to
infuse
could
to
bank
but
exemptions
in
A
struck.
possible
suggestion
bank
order
There
to
banks
ways.
practice,
positive
rural
accomplished
of
in
economic
of
Buildvu_.
capitalization
widespread
be
exclusive,
Capital the
base
to to
in tO their
increase continue
-
operation
and
increased
stay
buying
Still
deflnitely
be
This
and
other
than
from
a
is not
_e_
the
on
which
yields
problem
more
it
BtoQkholders.
Bills
a maCEoeconomio
is
be
money,
_
Treasury
attractive
approached
new
4_h.
may
that
Of
of
is
CB
more
8hares.
shares
reason
risklese
ceiling
provided
infusion
the
another
virtually
the
percent
. through
accompllshed
-
compet_.tive,
to-50
through
16
are
on
bank
that
cOmprehenelve
must view.
i
However, high
(b)
is
.External shares
presence
would
give
shares
of
mandatory be
those
less
is
same
time,
it
would
out
the
economic
have
the
may
have
been
used
may
and in
to
encourage
qualify
stipulated
in
commercial
give
Treasury
Bi11$
selllng
their
yield. rural
or
investments may
to
involve However,
equivalent
preferred
shares
onerous
CB
guarantee
The
requirement
that
stockholders째
difficulty
either banks.
on
could
This
potential
alternative
here
capitaliration.
banks
shares,
banks
that
Funds.
they
out
seQuritiee
high.yielding
rural
commercial
may
to
unless
feasible sell
bank
point
those
caplta_
rural
Attrac_in_ selling
off
to
on
rates
siphoned
increase
the
important
interest
also to
At
One
banks
to
common, of
a8
to
commercial part
PoD0 banks째
them
a mechanism
oppo_tunitie8
available
of
717.
the This
At to in
the find the
-
rural
(c)-
17
-
areas.
Merger_Consolidation. the
1980
financial
broadening
the
Perhaps, Rural can as
the Bank
De a way
regions.
This
of
examined of
reforms
as
capital
oÂŁ
Bohol
regard
encouraging
been
one
of
base
experience
and
has
with shared
n_re
the
with
oÂŁ
the
means
rural
First to
stressed
in of
banks.
Consolidated consolida_iOn
other
consolidation
rural, in
bank8 other
- IS TABLE EXEMPTIONS
AND
I
PRIVILEGES
OF
RURAL
BANKS '=
!
Taxes,e_-ges anefees1/
Ot,'_rs
FromO_traZ _
nora_
Gov't:,_¢ies
I [,
1. Tax for banks2/ 2. Income Fixed tax 3. Documentary stamp tax
1. From registration fees, 1. Free assistcharges and documentary anoe technical i stamps on any instruI 2. Free training of bank
4. Tax on income of banks 5. Fireazms tax 6. Deposit interest tax
7._al Prope_yTax
mant relati_ to transact/ons or loans extended• by the _B.
2.Frompublication in
8. All local tax (such as transfer tax, b,d_ding permit fee, mum/cipal secretary's fee, market fees or rentals, tolls for roads, bridges and canals, pemit to engage in business and residence tax} except for the annual business tax 9. Property registration fees I0. Docketing fees, sheriff's fee ii. Regulation fees for motor vehicles 12. Fees to-the Securities and
E_ge i/_
newspapers of foreclosure notices where the principal of the loan and interest due do not exceed 910,000.00.
officers 3. Free from management ta]r_ expemses
2. Co%u_texpartfund fram the Development Bank of the Philippines
I4.Umn byCBto_ on
3.n_e notarial service
,' ;
on doe,amirs by municipal and city judges 4. Borrowings from the Development Bank of the Philippines 5. Com_mory deposit insurance co_ara_ 6. O_antee coverage of oertain supervised
col/ateral of assets of _B, in _ies and financial crisis 5. Loan to _B through CB of fundslfrom internat/onal_iil_!ng I institu_'ons 6. Redi_ of STD Funds from (_
I
Comm_,_n applies o_y whennet_
I
1. A_vice on Business farm m_mgement by and other gov't, agencies
I _
o=m_-t
do_ not_=,eapm_._wer,
go beyond P3M, the taxes, charges or+-fees shall be levied in progc¢+_i_ When net assets exDeeds _3M, the RB shall pay all taxes, fees andS.
to that
if it exceeUs Pm _t does,ot.
Said excess bears to the net assets. i
2/Fixed tax of _2,000.00 shall be coll_ted form banks, insurance companies_ finance and investment ocmpanies, doing bus_ness in the ?l'ilippinesand fre_nc_isegrantees .(Sec. 192 gg). Fixed taxes ih the Natior___ Internal Revenue Code r_-_f_o7_I_ , to fk_+_,taxes on h_siness, i _19u,.++
- 19
TABLE RURAL
Year
BANKS'
De_osiÂŁs F No. of RBs
-
II
SOURCES
OF
B_rr0w_ngs No. of RBs
FUNDS
Capital No.
Accounts of RBs
1972
544839.2
395939.0
487309.6
1973
699044.5 (28.3)
611464.9 (54.4)
514331.2 (5.5.)
1974
821022.7 (17.4)
1454545.4 (137.9)
532670.4 (3.6)
1975
882812.5 (7.5)
1940104.1 (33.4)
554687.5 (4.1)
1976
1062111.8
1903105.5
619875.7
(20._)
(-1.9)
(11.8)
1977
1211764.7 (14.1)
1860000.0 (_2.3)
644705.8 (4.0)
1978
1387755.1 (14.5)
2070891.5 (i1.3)
675617.6 (4.8)
1979
1580838.3 (13.9)
2395209.5 (15.7)
706586.8 (4.6)
1980
1646317.8 (4.1)
2710271.3 (13.2)
731589.1 (3.5)
1981
1974038.4 (19.9)
3104807.6 (14.6)
850000.0 (16.2)
1982
2489835.4 (26.1)
3804453.0 (22.5)
979670.8 (15.2)
1983
2978095.2 (19.6)
4209523.8 (10.6)
1158095.2 (18,2)
Note:
Source:
Figures
Central
in
parentheses
Bank
of
the
are
growth
Philippines
rates.
.
TABLE
DISTRIBUTION
AND
GROWTH
III
RATES OF RESOURCES (IN PERCENT)
OF
BANKING
INSTITUTIONS
f
Banking System
0BM)
80380.0
Commercial Banks
73.8
96666.0 (20.3)
123276.0 (27.5)
157024.8 (27.4)
193559.2 (23.3)
228580.0 (18.1)
276056.6 (20.8)
330943.4 (19.9)
403700.4 (22.0)
72.9 (18.7)
74.3 (30.0)
74.8 (28.2)
74.6 (22.9)
74.8 (18.3}
74.1 (19.7)
75.0 (21.4)
74.1 (20.5)
Thrift Banks
3.8
4.2 (34.9)
4.5 (37.4)
4.9 (36.9)
5.4 (37.6)
4.2 (-8.1)
4.5 (29.5)
4.9 (28.3)
3.7 (-7.9)
Rural Banks
3.8
3.4 (i0.2)
3.3 (21.3)
3.1 (21.9)
2.8 (12.3)
2.8 (17.5)
2.9 (22.9)
2,8 (16.9
2.2
19.4 (25.4)
17.9 (17.2)
17.2 (22.4)
17.1 (22.8)
i8.2 (25.3)
18.5 (22.9)
17.3 (12.1)
Specla)/zed Gov't Banks
18.6
i
Note, Figures in parenthesesare Source:
Fact Book,
_
rats.
Financial system (various Issues)
r
--
20.0 (41.3) •
- 21 TABLE
DISTRIBUTION
1976 _
Banking
System
{_M)
co_ercL_ Banks
AND
GROWTH
1977
IV
RATES OF DEPOSITS (IN PERCENT)
1978
1979
OF BANKING
1980
INSTITUTIONS
1981
1982
1983
1984
/
34666.0
78.2
42506.3 (22.6)
54343.0 (27.8)
69780.5 (28.4)
89498.2 (28.2)
99594.2 (II.3)
119364.5 (19.8}
142181.7 (19.1)
153400.8 (7.9)
80.7
81.5
81.5
81.5
80.6
81.8
84.8
90.i
(26.5)
(29.2)
(28.3)
(28.2)
(I0.1)
(21.7)
(23.4)
(14.7)
Tnrift Banks
6.9
7.7 (37.5)
8.5 (39.9)
9.0 (36.6)
8.9 (26.9}
7.0 (-12.7)
7.8 (33.3)
7.8 (20.2)
4.5 (38.4)
Rural Banks
2.4
2.4 (21.I)
2.4 (25.4)
2.3 (22.5)
1.9 (7.3)
2.1 (20.9)
2.2 (25.3)
2.2 (21.6)
1.9 (-8.6)
12.4
9.1 (11.0)
7.6 (6.4)
7.2 (21.9)
7.7 (37.0}
10.3 (49.2)
8.2 (-4.7)
5.2 (-24.9)
3.5 (-26.5)
Specialized Gov't Banks
m
Note:
Fi_
Source:
r
in pe/e_theses are growth rates.
Fact Book, Philippige Financial STsta_ (Various Ism__-_
- 22
TABLE RATIO
OF LOANS
-
V TO
DEPOSITS
1976
1977
1978
1979
1980
1981
1982
1983
1984
1.49
1.44
1.43
1.44
1.34
1.40
1.38
1.44
1.53
1.41
1.28
1.32
1.32
1.22
1.29
1.23
1.28
1.12
0.85
0.87
0.83
0.81
0.82
0.87
0.86
0.96
1.38
3.00
2.68
2.59
2.57
2.69
2.60
2.53
2.39
2.38
2.06
2.89
2.92
3.24
2.95
2.36
3.10
4.35
N.A.
r
Banking
System
Comercial Thrift Rural
Banks
Banks Banks
Specialized
N.A. Source:
Gov't
= Not Fact
Banks
Available
Bookt
Philippine
Financial
System
(Various
Issues)
- 23 -
TABLE
RATIO
Year
OF NET
Comme rcial Bank s
VI
INCOME TO GROSS OPERATING SELECTED YEARS
'
Thr-l_ _ ...... Bank s
INCOME,
Rural Bank s
Toga 1
1978
18.I
7.7
T'_,_
16.5
1979
14.1
8.0
19.1
12.6
1980
i0.6
6.6
14.5
9.9
1981
8.1
(5.0)
14.1
7.1
1982
6.7
6.6
12.1
6.3
1983
8.0
5.7
10.1
6.9
1984
3.6
6.4
9.3
5.4
i
Sources
Central
Bank
of
the
f
Philipplnes.
I
I
f
•
F
_il
li'(
I
I'f
--
-
24 -
TABLE
RURAL
VII
BA_S' REDISCOUNTING ARREARAGES THE CENTRAL BANK, 1979_1984
Illfi
.......... Period
Anm_n_
n nm
I.
As
II.
_-i
--
S(_.lrce:
unl
--
I
•
--
•
Ili_ll_--
Iil/
P_at Ratio
I _r
Duo (%)
_ ....
December
1979
570 • 0
1980
720.0
2b. 3
28.5
1981
870.0
20.8
29.4
1982
960.0
10.3
26.3
1983
1201 • 7
25 • 2
29 • 9
1984
2579 • 1
1984
/
in_
-
ot end
rf
Ib C_nge Over Previous Year
"
WITH
Selected
28 • 0
114,5
72.2
Months
June
1984
1748.4
46.8
Sep_
1984
2249.6
61.2
Oc_
1984
2370.7
85.5
Dec
1984
2579.1
72.2
/
.....
T_%C
(1985)