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The paper analyzes the impact of major policy changes on banking structure, performance and competition, using bank-specific data from 1990-2002. We find that the entry of more market players is correlated with drops in interest spread and profits which, partly, bespeaks of possible dissipation of previous monopoly profits of large commercial banks. We also compute the H-stat based on the Panzar-Rosse methodology and find that, in general, despite the characteristic presence of few, large commercial banks, the sector is fairly competitive, specially in the loan-granting business. Moreover, competition has increased in the latter half of 1990s, primarily due to the presence of more small commercial banks, rather than big banks.

Citations

This publication has been cited time(s).

Dadzie, John K. and Alessandra Ferrari, 2019 "Deregulation, efficiency and competition in developing banking markets: Do reforms really work? A case study for Ghana" , Palgrave Macmillan
Khor, Niny, Ryan Jacildo, and Ruth Tacneng, 2016 "Assessing mandated credit programs: Case study of the Magna Carta in the Philippines" , Asian Growth Research Institute
Khor, Niny, Ryan Jacildo, and Ruth Tacneng, 2015 "Assessing mandated credit programs: Case study of the Magna Carta in the Philippines" , Asian Development Bank
Blažková, Ivana and Gabriela Chmelíková, 2016 "The influence of market concentration on the development of newly born businesses in the Czech Republic" , Mendel University Press
Fung, K.C., 2007 "Service trade liberalization as a development opportunity: The role for the World Trade Organization" , United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)
Can, Luc and Mohamed Ariff, 2009 "Performance of East Asian banking sectors under IMF-supported programs" , Taylor & Francis Journals

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Contributor

Philippine Institute for Development Studies

Authors

Milo, Melanie S. Pasadilla, Gloria

Keywords

competition policy; banking reforms; bank liberalization; h-statistics; Panzar-Rosse methodology

Effect of Liberalization on Banking Competition

Citations

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