A study on the efficiency and competition among selected universal banks in the Philippines for the period 2001-2010: Using data envelopment analysis and Panzar-Rosse model

• Main Authors: Go, Krystal Faith, Hsieh, Shirleen, Lazatin, Carmela, Uy, Cristine
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Universal banks > Philippines; Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18352
• Institution: De La Salle University

This paper is a study on the efficiency and degree of competition of the Philippine universal banking sector from 2001 to 2010. Banking efficiency is evaluated using Data Envelopment Analysis (DEA) and supplemented with analyses on economies of scope and scale. On the other hand, the degree of competition is indicated using the Panzar-Rosse Model. After which, the DEA efficiency score is incorporated into the Panzar-Rosse Model in order to see whether or not efficiency affects competition. Results suggest that BPI has been the most efficient universal bank throughout the studied period. Moreover, it is concluded that foreign banks tend to be more technically efficient than domestic banks and that large banks tend to be more efficient than small banks. As for competition, the structure for the Philippine universal banking industry is found to be in a monopolistic competition. Lastly, efficiency is shown to have little effect on the degree of competition.