Filipino president Benigno Aquino has approved a new banking bill that will allow global banks to acquire complete ownership of local lenders, with an aim to strengthen capital and financial markets in the country.

Earlier, foreign lenders were permitted to acquire 60% shareholding in Filipino lenders.

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Enacted prior to an economic integration of Southeast Asian nations scheduled in 2015, the new legislation brings Philippines in line with countries such as Australia and Japan, which allow banks to be wholly owned by foreign companies.

Bangko Sentral ng Pilipinas Governor Amando Tetangco said, "The economic benefits that can be derived from a further opening of the Philippine banking system to foreign banks are clear: augmentation of financial resources through increased foreign direct investments that will be available to the domestic banking market, transfer of technology, enhancement of human resource skills."

"These will help further strengthen the banking system and make our banks better-positioned in the face of ABIF (ASEAN Banking Integration Framework)."

Tetangco further noted that the new regulation will increase foreign direct investments in the country, and provide more financial resources to the domestic banking market, thereby paving the way for technology transfer while improving human resource competencies.

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Meanwhile, the Bankers Association of the Philippines (BAP) expressed concerns that many local banks may not survive the increased competition with the full entry of foreign banks.