Legislators in the Philippines are considering the introduction of a regulatory framework for virtual banks that would enable them to issue some letters of credit (L/Cs).

A bill presented in the Philippine House of Representatives, and expected to pass into law some time this year, would allow up to five virtual banks to operate initially.


The bill proposes that virtual banks would be able to issue domestic L/Cs, extend secured or unsecured loans and provide credit facilities for individuals.

Banks would also be able to invest in readily marketable bonds and other debt securities and accept savings and time deposits.

Capital requirement

Virtual banks would be required to have minimum capital of 20 billion Philippine peso (US$400 million) to be raised in four years.

Bangko Sentral ng Pilipinas (BSP), the Philippines' central bank, would grant licenses to operate to no more than five virtual bank applicants every year for five years, after which the number may be increased or decreased by the BSP's monetary board.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.