(DP 1984-03) Offshore Banking and the Philippine Economy

Abstract

Offshore banking in the Philippines was allowed after 1976. This has led to the esablishment of offshore units of banks actively engaged in international banking, which prospered especially in the 1970's. This paper discusses the rationale of the establishment of offshore banks in the prospective of the country's financial and banking policies, the benefits foreseen form their establishment, the future of the operations of the offshore banks, and their contributions to the Philippine economy. The establishment of the offshore banks has given rise to new financial policy issues. Commenting on the current financial crisis facing the Philippine economy, it is suggested that offshores banks face a difficult period ahead.