MONTE DE PIEDAD - In 1900, a young Filipino clerk worked at Monte de Piedad for 25 pesos a month. He would later become PRESIDENT of the PHILIPPINE COMMONWEALTH, MANUEL L. QUEZON. MONTE DE PIEDAD is considered the Philippines first savings bank. Its original name in Spanish was Monte de Piedad y Caja de Ahorros, and had its first building on Plaza Goiti in Santa Cruz, Manila. Its the capitalization of MONTE DE PIEDAD came from the so-called Obras Pias, funds of the Archdiocese of Manila that were used to finance the galleon trade and its charitable works. After the trade had ended, these funds were as capital for the first Philippine banks, including the Banco Espanol-Filipino in 1851 and MONTE DE PIEDAD in 1882. It was said that a Spanish Franciscan friar Felix Huertas was the prime mover in convincing the Archbishop of Manila and the Governor-General to establish a bank especially for the poor.businesses were concentrated in banking and pawnshops. On July 20, 1882 the bank was formally inaugurated, following the rules of the Monte de Piedad de Madrid. The bank formally started operations on August 2, 1882, with the main objective of providing collateral-backed loans to very poor people. It was initially located in the Colegio Santa Isabel in Intramuros. On June 24, 1887 it laid the cornerstone of its own building on the corner of Plaza Goiti and Escolta. The edifice was designed by Juan de Hervás in a neo-renaissance style. On July 4, 1894, the new building was inaugurated by Archbishop Bernardino de Nozaleda. MONTE DE PIEDAD has always been associated with the Catholic Church in the Philippines, with the Archbishop of Manila as the Chairman of the board of directors. THE AMERICAN ERA When the Americans took over the banking administration of the country in 1898, they reported that MONTE DE PIEDAD had outstanding loans of about 900,000 pesos. The Americans observed that the bank loaned money to poor people at a very low rate of 6% a year, and that all its loans were secured by pledges of jewelry, household articles and apparel as well as real estate mortgages. Its business affairs were conducted very conservatively and remained under the firm control of the Catholic church. In 1900, a young Filipino clerk worked at Monte de Piedad for 25 pesos a month. He would later become President of the Philippine Commonwealth, MANUEL L. QUEZON. MODERN ERA The bank survived World War II and the financial crisis of 1983 to 1985. Under Cardinal Jaime Sin in the early 1990s, the bank expanded its lending program to the poorest of the poor, targeting tricycle drivers and teachers. At about this time, the bank had two branches in operation: the main office located in Plaza Sta. Cruz (relocated from Plaza Goiti, which is now Plaza Lacson), and the branch located in Cubao, Quezon City. The 1998 report Financial Reform and Development in the Philippines, 1980-1997: Imperatives, Performance and Challenges of the Philippine Institute of Development Studies (PIDS), a research arm of NEDA, stated that the bank had engaged a lending conduit called Strategic Lending Investors (SLI) to administer the lending and collection of these microloans. In an audit in January 1994, it was revealed that SLI had made loans to mostly fictitious persons. Soon after, in October 1994, the said lending conduit closed shop. Monte de Piedad temporarily ceased operations in April 1997 until the Bangko Sentral ng Pilipinas (BSP) brokered a sale of the bank to the Keppel Group of Singapore. The BSP conducted an audit which revealed the following: 1) the bank had failed to maintain individual ledgers for the 2.5 million pesos loan programs, 2) all the loans were coursed through SLI, a corporation that had a capitalization of only 100,000 pesos, and 3) the bank had asked SLI to be both its conduit and collector for the said loans, an arrangement that the BSP deemed one-sided and disadvantageous to the bank. On October 5, 2005, General Electric Co. of Connecticut, USA, acquired Monte de Piedad, then known as Keppel Bank, for $25.8 million. It had been renamed after the Singapore-based group which had acquired it in 1997. At that time it had reported assets of US $90 million and 30 branches in the country. Keppel Bank agreed to invest US$40m as well as to cover the unfunded manager’s cheques issued before the bank closed. In March 2007, GE Money Bank, the new incarnation of Monte de Piedad, reported asset growth of more than 10%. Its total assets were pegged at 8.9 billion pesos, up from 7 billion the previous year. References Joaquin, Nick. Almanac for Manilenos. Manila, 1979. Colayco, Teresita. A Tradition of Leadership: The Story of the BPI. Manila, 1983. Agoncillo, Teodoro. History of the Filipino People. 3rd Ed. Q.C., 1985.
Posted on: Sat, 06 Dec 2014 00:34:07 +0000
Trending Topics
Recently Viewed Topics
© 2015