Postbank: the Government Savings Bank Gears up for Countryside Development

Top Quote Postbank is determined to play a role in the principal government objective of financial inclusion in order for the benefits of economic growth to filter down to the rural areas where poverty and unemployment abound. End Quote
  • (1888PressRelease) November 08, 2013 - The Philippine Postal Savings Bank - now rebranded as Postbank - is being revitalized as it shifts gears to help bring economic development to the countryside. The new focus, actually a return to its original mandate, is to provide banking services to the unbanked and underserved municipalities of the country, offering micro loans to Filipino entrepreneurs in the rural areas, and providing financial assistance to LGUs to allow them to address such basic community needs as water, power, health and sanitation, and housing.

    Postbank tells of an interesting journey of an institution going back to its roots to give meaning to its founding after a century of lackluster existence. Meant to make a difference in the rural landscape as a bank for people in the countryside, Postbank operated for a century like any conventional bank. It is now determined to play a role in the principal government objective of financial inclusion in order for the benefits of economic growth to filter down to the rural areas where poverty and unemployment abound. The Philippine Postal Savings Bank was established by the Philippine government way back in May 24, 1906 through Republic Act 1493. The bank was to be a Division of the Bureau of Posts.

    The PPSB's most important mandate back then was to serve depositors and provide financial access to the rural areas. The end result of this, ideally, would be to drive economic development to the countryside.

    Unfortunately, after decades of operation, PPSB was unable to satisfactorily fulfill its mandate. The bank was closed during the Japanese occupation and again in the 1970s during the martial law regime when the Philippine government decided that PPSB was unduly competing with the private banking sector and phased out its operation and its eventual dissolution. The Philippine National Bank served as the PPSB's liquidator.


    Under the Ramos administration, with the Philippine economy on the upswing, the government decided that re-opening the Philippine Postal Savings Bank as a subsidiary of the Philippine Postal Corporation (PHLPOST) would help bring economic development to the countryside. The PPSB re-opening in 1996 was part of the Macroeconomic & Development Financing Policy enunciated in the Ramos Administration's Medium-Term Philippine Development Plan, 1993-1998. Its mandate was to "develop the rural financial sector to ensure adequate supply of credit to the countryside".

    Through the years since it was re-established, the Bank posted modest gains, displaying some stability and resiliency; however, the Bank's growth remained at a plateau, with a limited capability to carry on its mandate.


    This is why, in 2011, consistent with President Aquino's commitment to bring economic development down to the grassroots, a revitalization of Postbank was carried out. Under the new management, the Bank is now going through a transformation process and is well on its way to growth.

    Postbank's strategy to bring financial services to the unbanked and underserved areas is elegantly simple but potentially effective: in a synergistic cooperation with the Philippine Postal Corporation, the latter's post offices around the country numbering about 1500 will house the micro banking offices of Postbank over time. Selected offices will also provide domestic and foreign remittance services as well as assist the bank in the delivery of core banking services.

    It is a strategy that is doable because of the existing infrastructure: since there are already existing postal offices in all municipalities and cities, there's no longer any need to build new structures, thus avoiding the need for brick-and-mortar expenses. Besides, the Bank can have access to the existing facilities and manpower of the Post offices.

    These micro banks will provide deposit and micro-loan services to individiual clients and organized groups as well as core banking products such as loans to commercial enterprises, SMEs, LGUs, agri-businesses, salary/consumption loans, and other conventional banking products/services.

    Postbank will also provide financial access to the unbanked and underserved municipalities so they can provide delivery of basic services, such as water, power, health and sanitation, and housing and others, thus improving the life quality of their constituents.

    Man for the job

    President Benigno Aquino III appointed former Secretary of the Department of Interior and Local Government (Cory Aquino administration) and former President and General Manager of the Government Service Insurance System (Fidel V. Ramos administration) Cesar Sarino, to head Postbank.

    When Sarino took up his post as president and also as CEO of the Philippine Postal Savings Bank, Inc. in 2011, he led that Bank through what he calls "the three stages of transformation". This was necessary, he said, because the PPSB had gone through some "rocky" periods and had become, in Sarino's description, "a sleeping dog."

    From August to December 2011, Sarino said the PPSB was on "survival mode." In 2012, the PPSB entered another stage in its rehabilitation, which Sarino called "Stabilization and Continuing Institutional Cleansing. This year 2013, Sarino is leading the PPSB into the stage of "Relevance and Growth" which includes re-branding the institution as "Postbank".

    When asked why he is undertaking the difficult challenge of resuscitating Postbank, Sarino remarked, "Fiipinos need the bank, especially those in the 32% of municipalities that have no bank in their areas. These so-called 'unbanked' areas need Postbank to help them generate savings, create livelihood opportunities and provide capital to the LGUs for basic social services, and essentially, uplift their quality of life at the level that is rightfully theirs."

    Sarino is a veteran in government service and in the corporate arena. A graduate of the Ateneo de Manila University, he finished his Bachelor of Science in Economics in 1958. He earned his Master's degree in Business Adminsitration at New York University in 1960.

    At DILG, Sarino left a legacy which now serves as the backbone as well as anchor of Local Governments the Local Government Code which serves as the "bible" in the efficient administration and governance of our local governments. Through most of his stint as DILG Undersecretary, he led the task force which crafted the Code details and then steered it through a maze of approving authorities, notably the Office of the President and Congress. And when Sarino became the Secretary of DILG, he saw it through its smooth implementation.

    At the GSIS, Sarino left an imprint on many fronts, but best remembered are the GSIS Law which among other provisions exempted the System from the Salary Standardization Law which paved the way for the improvement of the salary and benefits system of its officers and staff, the increase in benefits granted to GSIS pensioners, the improvement of the GSIS customer service, and of course, the completion of the humongous GSIS Headquarters building which has been home to the GSIS workforce and the Senate of the Philippines.

    With such a background, it is no surprise that President Aquino picked Sarino for the job of rehabilitating Postbank. Sarino is quick to emphasize while Postbank pursues its missionary goal, it shall continue to extend loans to the corporate sector, including SMEs and the agriculture sector. Sarino forsees that Postbank, whose stockholders are the Philippine Postal Corporation and the Government of the Philippines shall evolve into two major parallel groupings one to engage in core banking and another in micro-finance.

    "We want our Filipino depositors in the rural areas to be assured that, with the Philippine government and Postbank taking care of their hard-earned savings and helping them in their loans and investments, they will reap maximum benefits from an instituion that we can truly call the people's bank", Sarino said.

    For more information about PostBank and the services and benefits it offers, please log on to

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