The Philippine central bank has approved Taiwan’s Cathay United Bank, a wholly owned subsidiary of Cathay Financial Holding, to upgrade its representative office in the country to a full-service branch.

Bangko Sentral ng Pilipinas deputy governor Nestor Espenilla has confirmed the Monetary Board’s approval for the Taiwanese lender.

The nod will make Cathay United Bank the third foreign bank to operate in the region following a newly amended law that allows full entry of outside lenders in the Philippines.

Cathay United will need to put up an initial capital equivalent to PHP2.2bn ($49.48m), the minimum requirement for a commercial bank license with a single unit.

Cathay Financial Holdings executive vice president Alan Lee said: "This approval is the first case for Taiwan banks after the Philippine government opened up to foreigners."

The branch will start operations in the third quarter of 2015.