The central bank of Philippines has lifted a moratorium on the granting of licenses to set up new banks.
The move will be implemented in two phases, with the initial phase to allow existing thrift banks to apply for a license to convert into a universal or commercial bank, the central bank said in a statement. The first phase will be effective until the end of 2017.
The second phase will commence on 1 January 2018, when all restrictions on granting of licenses will be completely lifted, the central bank said.
The moratorium was imposed since 1999 to encourage the creation of bigger and stronger lenders through mergers and consolidations. The exception to this rule was license approval for new banks in unbanked areas and microfinance-oriented thrift and rural banks.
Bangko Sentral ng Pilipinas governor Amando Tetangco Jr. said: "This initiative provides local businesses the avenue to explore opportunities in the banking sector amid the opening of the industry to foreign capital infusion.
"The two-year transition period also gives interested parties ample time to strategically position themselves in line with evolving policy reforms and regional integration efforts."