Philippine Deposit Insurance Corporation (PDIC) President Jose Nograles encouraged banks to participate in the Investor-Investee Helpdesk, a matchmaking facility for banks spearheaded by PDIC. He said the facility, which is provided free-of-charge, will particularly benefit the 179 rural banks that the Bangko Sentral ng Pilipinas (BSP) said were capital deficient and under BSP prompt and corrective action (PCA). It will also be advantageous to those that plan to expand their market.

The PDIC chief said that the Helpdesk would further contribute to the continuing consolidation of the rural banking industry making it stronger. The facility, which was launched by PDIC early this year, would make it easier for banks that plan to merge with, invest in, or acquire capital-deficient or distressed banks to undertake mergers and consolidation, leading to greater strategic alliances and more concentrated but financially stronger banking industry. To date, 28 banks have registered with the Helpdesk.

Nograles said that more than a database, the Helpdesk will enable prospective investors and investees to identify a suitable counterparty that will fit their particular needs. He added that the Helpdesk will complement PDIC’s joint initiative with the BSP, the Strengthening Program for Rural Banks (SPRB), which will give financial incentives and assistance for the next two years, through a pooled fund, to investors who are willing to acquire capital deficient banks. The funding assistance to be extended under the SPRB is a combination of an injection of preferred shares and direct loan that could cover as much as 50% of the capital deficiency of a weak bank. The implementing guidelines for the SPRB are being finalized by PDIC and BSP.

“These programs would effectively address the capital deficiency problems of troubled banks while supporting acquiring banks with a need for a bigger branch network or an appetite for market expansion,” Nograles stressed. He enjoined the local banks to register with the Investor-Investee Helpdesk and avail of its services to contribute to creating stronger and more competitive banks in the system.