There are different types of banks in the Philippines with varying services and capabilities. The Bangko Sentral ng Pilipinas (BSP) supervises and regulates all banking institutions in the country.
The BSP classifies them into the following categories:
What are the different types of banks in the Philippines?
1. Commercial banks
Commercial banks serve individuals and organizations. They address regular financial needs such as:
- Deposits and withdrawals
- Checking and savings accounts
- Loan services
- Certificates of deposit
2. Universal banks
Universal banks can do everything that a commercial bank can. Plus, they are also authorized to function like an investment house. These banks can:
- Offer underwriting services
- Invest in non-allied undertakings
- Own up to 100% of the equity in a thrift bank, rural bank, financial allied enterprise, or a non-financial allied enterprise.
Meanwhile, publicly listed universal banks have the power to own up to 100% of the voting stock of only one other universal bank or commercial bank.
3. Thrift banks
This type of bank focuses on accumulating and investing depositors’ savings. They also provide short-term working capital, and medium- and long-term financing.
Thrift banks include:
- Savings and mortgage banks
- Private development banks
- Stock savings and loan associations
Thrift banks' main customers are businesses engaged in agriculture, services, industry and housing. They also cater to other markets, especially individuals and small and medium enterprises.
4. Rural banks
Popular in rural communities, these banks provide basic financial services to residents. Their goal is to promote and expand the local economy in an orderly and effective manner.
Rural banks offer help to farmers. They support different stages of production, from buying seedlings to marketing produce.
5. Cooperative banks
These banks are a lot like rural banks, but they differ in ownership. Rural banks are privately owned and managed. Cooperative banks are organized or owned by cooperatives or a federation of cooperatives.
Cooperative banks also assist farmers through financial services and solutions.
6. Islamic banks
Such banks follow the principles of the Shari’a, or Islamic Law. Their operations do not involve interest, or riba, which is prohibited by the Shari’a.
Islamic banks are expected to give Muslim Filipinos greater access to banking products and services. Their establishment supports the financial inclusion mandates of the BSP.
7. Digital banks
These are banks that offer financial products and services that are completely processed through a digital platform and/or electronic channels only.
They can’t have a physical branch, sub-branch or branch-lite units which offer financial products and services. However, they’re still required to have a head office in the Philippines.
How many types of banks are there in the Philippines?
Under the General Banking Act, there are 6 types of banks in the Philippines. These are commercial, universal, thrift, rural, cooperative, and Islamic banks.
In 2020, the BSP’s Monetary Board approved the inclusion of digital banks as another distinct type. The Monetary Board can also determine other classifications of banks.
