Proposed corporate strategies for Security Bank Corporation (SBC)

Date of Publication

1998

Document Type

Oral Comprehensive Exam

Degree Name

Master of Business Administration

Subject Categories

Business Administration, Management, and Operations

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation

Abstract/Summary

In recent years, the Philippine economy has made impressive progress, reflecting the implementation of prudent macroeconomic policies and sound structural reforms, as well as favorable external environment. By 1996, GNP growth had accelerated to 6.9%, led by exports and investments inflation had fallen to well within single digits and the external position had strengthened with rapid export growth, increasing reserves and a steady reduction of debt burden. Its extended growth pattern led many to believe that Philippines has finally achieved its own version of the so-called Asian miracle, earning for itself the label tiger cub.

During 1997 however, economic conditions specifically on the second half of the year, became markedly more difficult with the onset of the regional currency crisis. The event triggered a loss in confidence among foreign investors holding Southeast Asian assets in their portfolio. The exit of the foreign investors holding funds led to sharp drops in stock market indexes and unprecedented depreciation in Asian currencies including Philippine peso. Interest rates skyrocketed as central banks tried to arrest currency speculation. The stability of more financial institutions in the region is put into question as actual collapse of some was seen. This led to a further loss of confidence, negative market sentiments and further depreciation. However, despite of the crisis, Philippines economic growth is still projected to grow but slower than its pace in 1996.

Indeed, the more than 10,000 financial institutions operating in the Philippines today are in critical situation. In this environment, financial institutions are obviously the ones to suffer most. The increase in interest rates is seen to discourage borrowers and worse comes to worst, loans default are expected to rise.

With the regional currency crisis and the identifying competition existing in the financial services industry particularly brought about by the liberalization of the entry of foreign banks, financial institutions are expected to come up and implement certain strategies to survive and win the game. For several years, the theme in the financial services industry battle is market share. Several banks pursue geographic expansion to attain their objectives. However, geographic expansion is not a feasible short-term strategy in this kind of economic condition. Now, technology based products are being developed and upgraded by various local banks in order to compete with the foreign competitors. Certainty, the banks need to achieve a certain level of efficiency to survive. They have to be creative, to be different.

Abstract Format

html

Language

English

Format

Print

Accession Number

OCE0039

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

130 leaves ; 28 cm.

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