News

No ATM network merger for now in Philippines

May 13, 2004

PHILIPPINES - The odds don't appear to favor a merger between ATM networks Bancnet, Expressnet and Megalink, despite a pledge given by Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura in February to have their operations combined before he steps down in 2005.

According to an ABS CBN News report, Buenaventura said a consolidation of the three networks would lead to better operating efficiency -- and would allow consumers to have access to more ATMs.

But convincing ATM operators to combine into one network is proving more difficult than expected.

"We did some pencil pushing earlier and did not see any significant cost reduction that can be passed," said China Banking Corp. executive vice president Ricardo Chua, a Bancnet official, speaking at the bank's annual stockholders' meeting on May 6. "We are not yet convinced."

While the central bank is still determing how to get commercial banks' consent to an ATM network merger, Buenaventura is confident banks are more open to a merger today than they were in the late 1980s when they established the networks.

Control of the country's top commercial banks, which are mostly family-owned, is passing to the younger generation, which has different business attitudes than the network founders, Buenaventura said.  

The Asian banking crisis of 1997 has made competition more cutthroat amid a sluggish economy, encouraged consolidation and forced many executives to consider alliances, according to ABS CBN News.