Financial disasters are real as has been observed over the past several years with the global financial crisis of 2008 being the biggest. The fear of losing one’s savings from a bank failure is understandable. Today, the Philippine Deposit Insurance Corporation (PDIC) insures up to only 500,000 pesos of anyone’s total deposit in a single bank. But that does not ease the fear of many who saw how the victims of bank closures struggled to get back their deposits even with much lower amounts. The cases of Banco Filipino and Urban Bank’s closure carry some weight to depositors who worry about the risks involved with banking institutions.
Big banks are not immune to the dangers associated with the financial sector. But a combination of their size, management and history are indications to the public of their respective reliability. This is reinforced by the fact that the two examples mentioned above both involve banks which are comparatively smaller than the top three banks. It can be argued that the biggest three banks in the Philippines are our best bet to trust our money with either for savings or wealth management. This would make us more conservative with our limited choice but it would surely still give us some options to choose a safe haven.
I have been banking with BPI (Bank of the Philippine Islands) for as long as I can remember. This did not come about from a reasonable assessment but rather from pure chance. My first job after college used BPI for its payroll system. I was therefore using this particular account for more than six long years before I left the company. Subsequent employers also preferred BPI although they did not require it. If I had more experience with the other banks, I know I could have easily opted for either one of them. Even so I have friends and relatives using Metrobank and Banco de Oro. I believed then as I still do now that they are also as dependable as BPI, if not more so.
For ordinary working people, a bank's ubiquitous ATM’s either in shopping malls or in numerous branches all over the country is an advantage that cannot be underestimated. This is the primary selling point of the largest bank in the Philippines, Banco de Oro (BDO). Apart from having the most assets amounting to more than a trillion pesos as of September 30, 2011, the company is owned by SM which operates the largest and most popular mall chains in the country. BDO does not take its ties with the SM malls for granted. It has littered its sister company’s malls with ATM’s which are hard to miss given their prime location and number.
The only time I was able to open an account with BDO was when I decided to take a job with an insurance company as a part-time agent. That did not last too long and so did the account I opened. My experience with BDO was therefore limited to a few months but I have frequently transacted with their ATM’s as an alternative to BPI even with the associated charges due to their convenient locations. I also remember applying for a business loan from them which I intended to use as capital for a franchise venture. They disapproved the loan because of an undisclosed reason and advised that I reapply after six months. I was displeased by their refusal but was satisfied looking back at their cautious assessment of loan applications.
Metrobank used to be the largest bank in the country until BDO merged with Equitable PCI bank which had the end result of subordinating Metrobank to second place from that point forward. As of September 30, 2011, its asset is declared to be in the neighborhood of 918 billion pesos. This places Metrobank at a comfortable second place only slightly behind BDO.
I have never had an account with Metrobank but have also transacted using their ATM’s and did business with their asset management subsidiary First Metro Asset Management, Inc. (FAMI). In 2006, I was witness to the extraordinary performance of FAMI’s equity mutual fund that I invested more than 100,000 pesos to it. But the ensuing financial crisis in 2008 wiped out all the gains I made in 2007. Still, I waited until the market recovered in 2009 before I withdrew my money because of necessity without any profit whatsoever. It was a learning experience that showed me how a professionally run investment arm of Metrobank reflects well to its mother company’s image.
It would be simplistic to argue that these are the only banks that one should trust his or her money with. There are thousands of banks in the Philippines counting commercial, universal, rural, cooperative, thrift and quasi-banks. Specific knowledge of a particular bank’s history, performance and service is invaluable in choosing which bank is good for you.