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New CPRB guidelines out to create better opportunities for rural banks

December 7, 2017

The Philippine Deposit Insurance Corporation (PDIC), Bangko Sentral ng Pilipinas (BSP) and Land Bank of the Philippines (Land Bank) recently re-launched the Consolidation Program for Rural Banks (CPRB) which is available from October 26, 2017 up to October 26, 2019. An enhanced Program Guidelines has been issued to simplify and clarify the requirements and procedures. The Guidelines are posted in the PDIC website,

CPRB was originally launched in 2015 to promote bank mergers and consolidations that will bring about more resilient rural banks and a less fragmented banking system. The program also underscores the continuous need to enhance the viability of rural banks, recognizing their crucial role in providing financial services to local communities. Through mergers and consolidations, rural banks can improve their financial capacity and generate better value for shareholders, strengthen management and governance, develop synergies and economies of scale, and expand their market reach.

Under the enhanced Guidelines, the Program now accepts less than five participating rural banks provided the resulting bank will have a capital adequacy ratio of at least 12% and an unimpaired capital of at least P100 million.

The Program has also expanded the list of potential financial advisers that proponent banks may engage for financial advisory services. Rural banks may now choose a financial adviser from audit firms listed in the Top 1,000 Corporations in the Philippines and investment houses that are not subsidiaries, affiliates or units of banks. The financial advisers should have the capability to do valuation of banks, capital and ownership structuring, and prepare the proponent banks for legal and operational integration.

CPRB offers program support that includes funding support for financial advisory services and business process improvement services subject to the subsidy limits set under the Program.

PDIC President Roberto B. Tan said that the enhanced CPRB guidelines outlined more flexible terms to be able to create better opportunities for rural banks to further strengthen and enhance their viability. Tan also underscored the importance of rural banks in providing essential financial services to the community, citing that their specialized or niche markets are valuable in promoting financial inclusion and financial stability.

Since the launch of the Program in August 2015, three bank groups involving 13 rural banks have availed of the CPRB financial advisory support -- two groups are completing the financial advisory phase while one has already advanced to the next phase of seeking approval from the regulators – PDIC, BSP and the Securities and Exchange Commission (SEC). President Tan is optimistic that more rural banks will consider mergers or consolidations under the CPRB in view of their continuous expression of interest to strengthen their respective banks and the rural banking industry.

The rural banking sector consists of 495 rural banks nationwide with 2,788 banking offices as of June 2017. Combined, the rural banks have total deposits of P161.9 billion representing about 7.4 million accounts. During a five-year period from 2013 to 2017, the number of deposit accounts grew by 35% from 5.4 million deposit accounts, mirroring the rural banking sector’s capability to grow and service the financial needs of its market; and reach the unbanked areas of the country.

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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is PHP500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website,


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