Bernardo M. Villegas
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Countryside Banking

           There are more than four million small farmers who have been beneficiaries of agrarian reform over the last twenty five years.  They remain to be among the poorest of the poor, not because fragmentation is incompatible with high productivity and incomes for the small farmers.  Taiwan and Thailand have demonstrated that small farmers can earn a comfortable living if they are supplied with the appropriate infrastructures such as farm to market roads, irrigation systems and post-harvest facilities by the State.  These are indispensable conditions for the success of any agrarian reform program.  We have failed miserably in this regard.  Fortunately, there is now a greater effort to provide these missing infrastructures.  They are not sufficient, however.  The physical infrastructures must be complemented by the software:  agricultural extension services and rural credit, among others. Unfortunately, the banking system, both government and private, has generally failed to give small farmers access to credit at reasonable terms.  This is especially true in the agribusiness center of the Philippines, Mindanao.

          Fortunately, there is one rural bank in Mindanao that has been exceptionally successful in servicing small farmers and other rural enterprises.  The bank is called One Network Bank which in 2011 had a total of 82 branches spread out all over Mindanao.  ONB's unequalled infrastructure in Mindanao can be attributed to its unwavering focus on its brand of "inclusive banking," venturing boldly into unbanked and underbanked places where other banks would not dare go, enabling every community in which it has a branch to experience e-banking products and services.  ONB stands on very solid financial foundations.  In 2011, it had total resources of P15.6 billion; loans of P10.3 billion; stockholders' equity of P2.5 billion; return on private investment of 26%; risk-based capital adequacy ratio of 19%; liquidity ratio of 38%; non-performing loans of 3%; and non-performing assets of 2%.  In the same year, ONB had 1,206 employees, 82 branches and 114 ATMs.

          I have seen at close range how it has achieved its vision over the last decade:  to be the Philippines' widest banking network in progressive communities unserved or underserved by commercial banks, especially in rural areas, powered by values-driven professionals with a deep sense of mission to provide these communities easy access to modern quality banking services.  The results over the last eight years have amply demonstrated that it has accomplished much of its mission, which is to provide the widest possible array of financial products and services in the countryside of Mindanao.

          For example, in 2011, the following were quantitative achievements of ONB:

          - Deposits increased year-on-year by 11%.

          - The loan portfolio recovered from the sluggish performance in 2010 by growing at 72%.

          - Total comprehensive net income rose 65% from P316 million in 2010 to P521 million.

          - Resources expanded 32% to P15.6 billion.

          - Its counters moved P27.5 billion in terms of cash transfers and its ATMs dispensed an additional P17.7 billion.  ONB grew its ATM network 24% in terms of cardholders and 23% in terms of withdrawals.  By adding 10 more ATMs, the ATM count reached 114 by the end of 2111.

          ONB is one rural bank that has kept up with best practices in the financial sector.  Since its first consolidation in 2004, it managed to meet the parallel demand for more backroom support.  Last May 11, 2011, ground was broken for ONB Center, a building complex providing almost 10,000 square meters of office space for present and future needs.  Barely five months later, the 7-storey building in Sasa, Davao City was topped off, paving the way for hosting ONB's head office in 2012.  ONB has made banking services accessible even to farmers in the most remote areas of Mindanao, not only by multiplying branches, but also by aggressively deploying the ONB PeraAgad ATMS.  In fact, its PerAgad ATM was accorded a MegaLink Award for Top Onsite ATM.  By end 2011, ONB's PeraAgad ATMs served a total of around 350,000 cardholders which was a 19% increase from the same period a year ago, with an average monthly withdrawal transaction of P1.47 billion.  It also introduced the PeraAgad Pinoy savings account, with a minimum deposit balance requirement of only P100.  For individuals with bigger savings capacity (for example, the relatives of OFWs), there is the PeraAgad ATM Promo with a minimum deposit of P3,000 and without any transaction fee.  In addition, all checking accounts come with a free Peragad ATM Tseke card which is linked to the client's checking account to provide an alternative to writing checks when the immediate need for cash arises. 

          The good news is that ONB is beginning to expand outside Mindanao, targeting Iloilo for its first move northward.  I have no doubts that ONB will be serving small farmers and small businessmen in the countryside in other remote areas of the Visayas and Luzon in the coming years.  It will be an important engine of growth of the increase in food production which is going to be a major contributor to the 7% or more inclusive growth that is expected in the coming decades.  Those who want more information about One Network Bank may go to its website which is For comments, my email address is