PHILIPPINE POSTAL SAVINGS BANK, INC. HISTORY
On 24 May 1906, Act No. 1493 was passed creating the Postal Savings Bank (“Postbank”) as a division of the Bureau of Posts. This brought banking services to rural areas and enabled the Government to tap savings in the countryside.
The continuous banking operation of Postbank was interrupted during the Japanese occupation with the breakdown of the banking system due to war and hyper-inflation brought about by the introduction of Japanese war notes as medium of payment.
Postbank resumed operations in 1946 shortly after the end of the Japanese war. Starting with savings deposit accounts amounting to P4,104,223, the bank rapidly grew. Deposits jumped to P14.4 million in 1947, P25 million in 1948 and P33 million in 1949.
In the 1960’s, the private banking sector, especially the rural banks, rapidly expanded. Many of Postbank’s depositors shifted to private banks which offered higher interest. This led to a slowdown in the growth of Postbank’s deposits and lending operations.
Shortly after Martial Law was declared, President Marcos issued on January 29, 1973 Presidential Decree No. 121 which directed the gradual dissolution of Postbank on the ground that it was unduly competing with private thrift banks. The operation of Postbank was completely phased out and its assets were transferred to the Philippine National Bank (PNB) which served as liquidator pursuant to P.D. No. 241.
On April 2, 1992, Republic Act No. 7354 was passed transforming the Bureau of Post into an autonomous chartered corporation — renamed as the “Philippine Postal Corporation” (Philpost). Among the powers granted by said law to Philpost was the power to reopen or reactivate the Philippine Postal Savings Bank (PPSB). In the exercise of this power, the Philpost Board of Directors passed Resolution No. 94-36 authorizing the re-establishment of Postbank as a wholly-owned subsidiary. Philpost authorized the re-establishment of Postbank in line with the Medium Term Corporate Plan of Philpost as embodied in its Resolution No.93-119. Among the goals of said Plan was “to develop the rural financial sector to ensure adequate supply of credit to the countryside.”
The incorporation of the Philippine Postal Savings Bank, Inc. was approved by the Securities and Exchange Commission on June 22, 1994 with an authorized capital of P1.0 Billion of which P500 Million was subscribed by Philpost. It was formally re-opened by President Fidel V. Ramos at a simple ceremony held in Malacanang on July 21, 1994.