The Bangko Sentral ng Pilipinas (BSP) said the Strengthening Program for Rural Banks (SPRB) Plus launched recently in coordination with the Philippine Deposit Insurance Corp. (PDIC) will be of great help to distressed rural banks (RBs).
BSP deputy governor for supervision and examination sector Nestor Espenilla said the improved SPRB Plus will enable universal or commercial banks bail out a financially ailing bank.
Under the original SPRB, only RBs can help another RB as it was on the supplemental agreement between the BSP and PDIC.
The two agencies strengthened the program for RBs as a number of RBs were placed under PDIC receivership in the last two years.   
“The joint SPRB Plus program of BSP-PDIC provides an opportunity for an undercapitalized bank to take in a strong bank as a partner,” Espenilla explained to the Daily Tribune.
The official added that once a financially-ailing bank is rescued by another bank, it relieves the PDIC the burden of paying deposits up to P500,000.
Under the General Banking Act, those who have more than half a million peso deposit must wait for the closed bank’s rehabilitation or liquidation before they can get their money back.
“It’s a win-win situation,” Espenilla said.
The weak bank avoids further sanctions and possible closure and its depositors are placed in safe harbor.
The strong bank gains an opportunity to more rapidly expand its business and avail itself of regulatory incentives like branching privilege in restricted areas,” Espenilla added.
So far, the PDIC corporate affairs said the corporation accepted a total of 18 applications for SPRB Plus involving 32 banks.
No timetable has been given when the applications will be approved or disapproved.