Philippine National Bank
Encyclopedia
The Philippine National Bank (PNB, Filipino
: Bangko Nasyonal ng Pilipinas, Castillian Spanish: Banco Nacional de Agricola de Filipinas) is one of the largest banks in the Philippines
, ranking fourth in terms of assets. It was established by the Philippine government on July 22, 1916, during the American colonial period, and became the first universal bank
in the Philippines in 1980. It was privatized in 1989. PNB currently has over 100 branches throughout Asia, Europe, the Middle East and North America.
, then raging in Europe, generated huge demand for the country's major exports namely: sugar, copra, coconut oil, Manila hemp and tobacco. However, not much was being done to develop the industries that produced these sought-after crops since access to credit facilities was limited. To solve this problem, Henderson Martin, Vice Governor of the Philippines, together with Miguel Cuaderno (who later became Central Bank governor) drafted a charter for a national bank.
On February 4, 1916, Public Act 2612 was passed by the Philippine Legislature
providing for the establishment of PNB to replace the small P1 million government-owned Agricultural Bank. PNB's first head office was the Masonic Temple along Escolta, Manila
, the then "Wall Street of the Philippines" in the bustling district of Sta. Cruz in Manila. An American, Henry Parker Willis
, was its first president.
With PNB's establishment, Filipinos had a bank of their own. PNB was authorized to grant short and long-term loans to agriculture and industry. Filipino farmers then could avail of loans with interest between 8% to 10% per annum. PNB was also authorized to receive deposits, open foreign credits and rediscount bills.
On July 24, 1916, PNB established its first branch in Iloilo
. In 1917, PNB opened its first non-Philippine branch in New York
. The following year, it established five more domestic branches and another outside the Philippines in Shanghai
, China
.
Central Bank of the Philippines until 1949. It was given the special power to issue circulating notes.
PNB briefly ceased operations in January 1942 but reopened the next month under the supervision of Japan
ese authorities. After the Second World War
, PNB reopened immediately and acquired the assets and assumed the liabilities of the banking division of the Bangko Sentral ng Pilipinas.
With the establishment of the Central Bank in 1949, PNB's role as issuer of currency notes, custodianship of bank reserves, sole depository of government funds and clearing house of the banking system ceased.
PNB transferred to its new Head Office along Escolta in 1966 and launched the first on-line Electronic Data Processing System in the Far East
.
Between 1967 and 1979, PNB opened offices in London
, Singapore
, Jakarta
, Honolulu and Amsterdam
, and 14 provincial branches. It also started the Dollar Remittance Program.
In 1980, PNB became the first universal bank
in the country. However, it encountered difficulties in the mid-80s as a result of the economic downturn triggered by the assassination of Senator Benigno S. Aquino, Jr. and in 1986 received assistance from the government.
In 1992, PNB became the first Philippine bank to reach P100 billion in assets. Later that year, privatization continued with a second public offering of its shares.
In 1995, PNB moved to its headquarters to the PNB Financial Center, Central Boulevard (now Diosdado Macapagal Boulevard
), Pasay. In 1996, the Securities and Exchange Commission
approved the Bank's new Articles of Incorporation and by-laws and the change in the status of PNB from a government-based to a private corporation with the control of the government reduced to 46 per cent.
Group became the single biggest private stockholder. In less than one year, the group pumped nearly P20 billion of fresh capital into the bank.
In late-2000, when PNB suffered huge withdrawals, mainly from the government accounts, the government provided P25 billion in financial aid..
In May 2002, the Philippine government and Lucio Tan
signed an agreement to swap the government's loans to shares. The accord increased the government's stake to 45 percent from 16 percent and reduced Lucio Tan's holding to 45 percent from 67 percent. Lucio Tan and the government also agreed that year to sell three-quarters of their combined stake within five years.
Following the Senior Management’s Good Bank-Bad Bank strategy, PNB finally posted an income of P52 million (as restated from an earlier reported figure of P168 million, due to changes in Generally Accepted Accounting Principles) in 2003, after several years of being in the red. The bank was able to repeat this feat and reported an income of P353 million by end-2004.
In August 2005, PNB was fully privatized. The joint sale by the Philippine government and the Lucio Tan Group of the 67% stake in PNB was completed within the third quarter of 2005. The Lucio Tan Group exercised its right to match the P 43.77 per share bid offered by a competitor and purchased the shares owned by the government. The completion of sale is expected to speed up the development of PNB’s franchise and operational competitiveness.
Despite being fully privatized, PNB continued to be a government depository bank until May 3, 2007.
The Balikat ng Bayan Awards serve as PNB’s reassurance to uphold its commitment to its customers, employees and shareholders.
Additionally, PNB was voted by the consumers for the fourth consecutive year (2003–2007) as Most Trusted Brand - Gold Category from the joint survey of the venerable international publication, Reader’s Digest, and global media research giant, ACNielsen
, along with a host of other brand leaders in the consumer product categories.
PNB maintains remittance centers in the United States
, Canada
, England
, Spain
, the Netherlands, France
, Germany
, Austria
, Italy
, Hong Kong
, Japan
, Singapore
, Malaysia and the Middle East
.
PNB has also stepped up its marketing efforts to overseas Filipino workers with its PNB Global Filipino Money Card.
Complementing PNB's banking activities are its subsidiaries like PNB General Insurers, a non-life insurance company; PNB Capital, an investment bank; PNB Securities, a stock brokerage outfit and PNB Forex, which engages in foreign exchange trading. It also has a majority stake in PNB-Japan Leasing Corp. For life insurance requirements of PNB clients, it has a substantial equity stake in Beneficial PNB Life.
On December 7, 2007, the Supreme Court of the Philippines
affirmed a judgment dismissing the state's sequestration of Lucio Tan
's companies: "There can be no question that indeed, petitioner's (the government's) orders of sequestration are void and have no legal effect." The landmark decision would trigger a planned merger between Philippine National Bank (PNB) and Tan's own Allied Banking Corporation
. Edgar Bancod, research head, ATR-Kim Eng Securities, stated that the merged bank would become the country's 4th biggest after Metropolitan Bank & Trust Co.
, Banco de Oro Unibank, Inc., and Bank of the Philippine Islands
.
As of December 12, 2007, official statements from PNB and Allied Bank
has confirmed the pending merger of both Lucio Tan-led banks early 2008.
On August 2009, PNB and Allied Bank are expected to complete their merger within the next six to nine months, after the latter sells its 28% stake in California-based Oceanic Bank.
As of July 7, 2010, The remaining stumbling block to the merger between tycoon Lucio Tan's banking units Philippine National Bank and Allied Banking Corp. has been addressed as the latter found a buyer for its minority stake in a California-based bank. The move is seen paving the way for the merger of Allied Bank and Philippine National Bank (PNB), which Tan also owns, with PNB as the surviving entity.
.
Filipino language
This move has drawn much criticism from other regional groups.In 1987, a new constitution introduced many provisions for the language.Article XIV, Section 6, omits any mention of Tagalog as the basis for Filipino, and states that:...
: Bangko Nasyonal ng Pilipinas, Castillian Spanish: Banco Nacional de Agricola de Filipinas) is one of the largest banks in the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
, ranking fourth in terms of assets. It was established by the Philippine government on July 22, 1916, during the American colonial period, and became the first universal bank
Universal bank
A universal bank participates in many kinds of banking activities and is both a commercial bank and an investment bank.The concept is most relevant in the United Kingdom and the United States, where historically there was a distinction drawn between pure investment banks and commercial banks. In...
in the Philippines in 1980. It was privatized in 1989. PNB currently has over 100 branches throughout Asia, Europe, the Middle East and North America.
History
The Philippine National Bank was established as a government-owned banking institution on July 22, 1916. Its primary mandate was to provide financial services to Philippine industry and agriculture and support the government's economic development effort. World War IWorld War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, then raging in Europe, generated huge demand for the country's major exports namely: sugar, copra, coconut oil, Manila hemp and tobacco. However, not much was being done to develop the industries that produced these sought-after crops since access to credit facilities was limited. To solve this problem, Henderson Martin, Vice Governor of the Philippines, together with Miguel Cuaderno (who later became Central Bank governor) drafted a charter for a national bank.
On February 4, 1916, Public Act 2612 was passed by the Philippine Legislature
Philippine Legislature
The Philippine Legislature was the legislative body of the Philippines during the earlier part U.S. colonial administration. It was a bicameral legislature, with the Philippine Commission, headed by the U.S. Governor General serving as the upper house, and the Philippine Assembly serving as the...
providing for the establishment of PNB to replace the small P1 million government-owned Agricultural Bank. PNB's first head office was the Masonic Temple along Escolta, Manila
Manila
Manila is the capital of the Philippines. It is one of the sixteen cities forming Metro Manila.Manila is located on the eastern shores of Manila Bay and is bordered by Navotas and Caloocan to the north, Quezon City to the northeast, San Juan and Mandaluyong to the east, Makati on the southeast,...
, the then "Wall Street of the Philippines" in the bustling district of Sta. Cruz in Manila. An American, Henry Parker Willis
Henry Parker Willis
Henry Parker Willis, Ph. D. was an American financial expert, born at Weymouth, Massachusetts, the son of Universalist minister and suffragist Olympia Brown. He graduated from the University of Chicago with a Ph.D in 1897....
, was its first president.
With PNB's establishment, Filipinos had a bank of their own. PNB was authorized to grant short and long-term loans to agriculture and industry. Filipino farmers then could avail of loans with interest between 8% to 10% per annum. PNB was also authorized to receive deposits, open foreign credits and rediscount bills.
On July 24, 1916, PNB established its first branch in Iloilo
Iloilo
Iloilo is a province of the Philippines located in the Western Visayas region. Iloilo occupies the southeast portion of Panay Island and is bordered by Antique Province to the west and Capiz Province and the Jintotolo Channel to the north. Just off Iloilo's southeast coast is Guimaras Province,...
. In 1917, PNB opened its first non-Philippine branch in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
. The following year, it established five more domestic branches and another outside the Philippines in Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
.
PNB as de facto Central Bank and National Treasury
PNB has also functioned as the de factoDe facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
Central Bank of the Philippines until 1949. It was given the special power to issue circulating notes.
PNB briefly ceased operations in January 1942 but reopened the next month under the supervision of Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese authorities. After the Second World War
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, PNB reopened immediately and acquired the assets and assumed the liabilities of the banking division of the Bangko Sentral ng Pilipinas.
With the establishment of the Central Bank in 1949, PNB's role as issuer of currency notes, custodianship of bank reserves, sole depository of government funds and clearing house of the banking system ceased.
PNB investments
In 1955, it was authorized to operate as an investment bank with powers to own shares and to issue debentures. In 1963, it established the National Investment and Development Corporation to engage primarily in long-term and equity financing of business ventures.PNB transferred to its new Head Office along Escolta in 1966 and launched the first on-line Electronic Data Processing System in the Far East
Far East
The Far East is an English term mostly describing East Asia and Southeast Asia, with South Asia sometimes also included for economic and cultural reasons.The term came into use in European geopolitical discourse in the 19th century,...
.
Between 1967 and 1979, PNB opened offices in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Jakarta
Jakarta
Jakarta is the capital and largest city of Indonesia. Officially known as the Special Capital Territory of Jakarta, it is located on the northwest coast of Java, has an area of , and a population of 9,580,000. Jakarta is the country's economic, cultural and political centre...
, Honolulu and Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
, and 14 provincial branches. It also started the Dollar Remittance Program.
In 1980, PNB became the first universal bank
Universal bank
A universal bank participates in many kinds of banking activities and is both a commercial bank and an investment bank.The concept is most relevant in the United Kingdom and the United States, where historically there was a distinction drawn between pure investment banks and commercial banks. In...
in the country. However, it encountered difficulties in the mid-80s as a result of the economic downturn triggered by the assassination of Senator Benigno S. Aquino, Jr. and in 1986 received assistance from the government.
Privatization of PNB
The privatization started in 1989 when 30 per cent of its shares were offered to the public and it was listed on the stock exchange.In 1992, PNB became the first Philippine bank to reach P100 billion in assets. Later that year, privatization continued with a second public offering of its shares.
In 1995, PNB moved to its headquarters to the PNB Financial Center, Central Boulevard (now Diosdado Macapagal Boulevard
Diosdado Macapagal Boulevard
Diosdado Macapagal Boulevard is a modern eight-lane road parallel to Roxas Boulevard running from CCP Complex, Pasay City to Marina Subdivision, Parañaque City, both in Metro Manila. It was named after former President Diosdado Macapagal. It is located in the reclamation areas...
), Pasay. In 1996, the Securities and Exchange Commission
Securities and Exchange Commission (Philippines)
The Philippine Securities and Exchange Commission is a Philippine state commission responsible for securities laws and regulating the securities industry. The SEC is an agency within the Philippine Department of Finance....
approved the Bank's new Articles of Incorporation and by-laws and the change in the status of PNB from a government-based to a private corporation with the control of the government reduced to 46 per cent.
A New Beginning
In early 2000, the Lucio TanLucio Tan
Lucio Tan is a prominent Chinese Filipino business magnate and is one of the most prominent business magnates in the Philippines...
Group became the single biggest private stockholder. In less than one year, the group pumped nearly P20 billion of fresh capital into the bank.
In late-2000, when PNB suffered huge withdrawals, mainly from the government accounts, the government provided P25 billion in financial aid..
In May 2002, the Philippine government and Lucio Tan
Lucio Tan
Lucio Tan is a prominent Chinese Filipino business magnate and is one of the most prominent business magnates in the Philippines...
signed an agreement to swap the government's loans to shares. The accord increased the government's stake to 45 percent from 16 percent and reduced Lucio Tan's holding to 45 percent from 67 percent. Lucio Tan and the government also agreed that year to sell three-quarters of their combined stake within five years.
Following the Senior Management’s Good Bank-Bad Bank strategy, PNB finally posted an income of P52 million (as restated from an earlier reported figure of P168 million, due to changes in Generally Accepted Accounting Principles) in 2003, after several years of being in the red. The bank was able to repeat this feat and reported an income of P353 million by end-2004.
In August 2005, PNB was fully privatized. The joint sale by the Philippine government and the Lucio Tan Group of the 67% stake in PNB was completed within the third quarter of 2005. The Lucio Tan Group exercised its right to match the P 43.77 per share bid offered by a competitor and purchased the shares owned by the government. The completion of sale is expected to speed up the development of PNB’s franchise and operational competitiveness.
Despite being fully privatized, PNB continued to be a government depository bank until May 3, 2007.
PNB Today
PNB has won a string of recognitions and awards. The Philippine National Bank was recently awarded the 2007 SSS Balikat ng Bayan Award Hall of Fame as Best Paying Bank, the 2007 SSS Balikat ng Bayan Award for Best Collecting Bank for OFW Remittances and the 2007 SSS Balikat ng Bayan Award for Best Paying Commercial Bank. The Hall of Fame Award is given to employers, collecting and paying banks and participating financial institutions in recognition of their invaluable support to the SSS programs and their long years of excellent performance as SSS partners. PNB was awarded as Best Paying Bank during the years 1997, 1999, 2000, 2002, 2003, 2004, 2005 and 2006 or a total of eight (8) times, clearly indicative of the Bank’s outstanding accomplishment in championing the SSS mission. Accordingly, the Bank was bequeathed the Hall of Fame Award for its consistent practices over the years. Also this year, the Bank emerged as the winner in the Best Collecting Bask for OFW Remittances category, garnering a rating of 86.5% based on the evaluation of the SSS International Affairs & Branch Expansion Division. In order to qualify for the Best Collecting Bank Award for OFW Remittances, a bank has to have a significant quantity of overseas collection, extensive overseas presence, and affordable remittance services. This award reflects PNB’s responsiveness and unwavering commitment to fulfill the needs of both local and Global Filipinos. Lastly, PNB topped the Best Paying Commercial Bank category with an overall rating of 87.45% as evaluated by the SSS Retirement, Death & Funeral Benefits Program. This award is given to accredited banks, which promptly deliver benefits to SSS members. Banks are evaluated in terms of the number of pensioners being served and the number of branches nationwide.The Balikat ng Bayan Awards serve as PNB’s reassurance to uphold its commitment to its customers, employees and shareholders.
Additionally, PNB was voted by the consumers for the fourth consecutive year (2003–2007) as Most Trusted Brand - Gold Category from the joint survey of the venerable international publication, Reader’s Digest, and global media research giant, ACNielsen
ACNielsen
ACNielsen is a global marketing research firm, with worldwide headquarters in New York City. Regional headquarters for North America are located in Schaumburg, Illinois. As of May 2010, it is part of The Nielsen Company.-History:...
, along with a host of other brand leaders in the consumer product categories.
PNB maintains remittance centers in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, the Netherlands, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Malaysia and the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
.
PNB has also stepped up its marketing efforts to overseas Filipino workers with its PNB Global Filipino Money Card.
Complementing PNB's banking activities are its subsidiaries like PNB General Insurers, a non-life insurance company; PNB Capital, an investment bank; PNB Securities, a stock brokerage outfit and PNB Forex, which engages in foreign exchange trading. It also has a majority stake in PNB-Japan Leasing Corp. For life insurance requirements of PNB clients, it has a substantial equity stake in Beneficial PNB Life.
On December 7, 2007, the Supreme Court of the Philippines
Supreme Court of the Philippines
The Supreme Court of the Philippines is the Philippines' highest judicial court, as well as the court of last resort. The court consists of 14 Associate Justices and 1 Chief Justice...
affirmed a judgment dismissing the state's sequestration of Lucio Tan
Lucio Tan
Lucio Tan is a prominent Chinese Filipino business magnate and is one of the most prominent business magnates in the Philippines...
's companies: "There can be no question that indeed, petitioner's (the government's) orders of sequestration are void and have no legal effect." The landmark decision would trigger a planned merger between Philippine National Bank (PNB) and Tan's own Allied Banking Corporation
Allied Bank
Allied Bank, formally known as Allied Banking Corporation, is one of the largest banks in the Philippines, ranking tenth in terms of assets...
. Edgar Bancod, research head, ATR-Kim Eng Securities, stated that the merged bank would become the country's 4th biggest after Metropolitan Bank & Trust Co.
Metrobank
Metrobank can refer to:*Metropolitan Bank and Trust Company , a Philippine bank*MetroBank, the subsidiary of MetroCorp Bancshares, an American bank based in Houston, Texas* Metro Bank , a British retail bank established in 2010...
, Banco de Oro Unibank, Inc., and Bank of the Philippine Islands
Bank of the Philippine Islands
Bank of the Philippine Islands is the oldest bank in the Philippines still in operation and is the country's third largest bank in terms of assets, the country's largest bank in terms of market capitalization, and the country's most profitable bank...
.
As of December 12, 2007, official statements from PNB and Allied Bank
Allied Bank
Allied Bank, formally known as Allied Banking Corporation, is one of the largest banks in the Philippines, ranking tenth in terms of assets...
has confirmed the pending merger of both Lucio Tan-led banks early 2008.
On August 2009, PNB and Allied Bank are expected to complete their merger within the next six to nine months, after the latter sells its 28% stake in California-based Oceanic Bank.
As of July 7, 2010, The remaining stumbling block to the merger between tycoon Lucio Tan's banking units Philippine National Bank and Allied Banking Corp. has been addressed as the latter found a buyer for its minority stake in a California-based bank. The move is seen paving the way for the merger of Allied Bank and Philippine National Bank (PNB), which Tan also owns, with PNB as the surviving entity.
Employee Unions
In Japan, employees of the Tokyo branch of the PNB are represented by the union TozenTozen
' is a Japanese labor union. Known as the Tokyo General Union, or , was formed in 2010, and is one of few foreign-led multiethnic unions in Japan...
.