A study on the impact of elections and ownership on the performance of commercial banks in the Philippines

• Main Authors: Bradd, Kevin A., Cervas, Rachelle Ann G., Llamado, Jill P.
• Format: text
• Language: English
• Published: Animo Repository 2009
• Subjects: Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18441
• Institution: De La Salle University

Over the years, the Philippine electroral system has faced a lot of issues with cheating, icluding vote buying, padding voters' lists, and the infamous dagdag-bawas. Considering the importance of elections and the issues related to such event, knowing the effects of elections on bank performance can be useful to many. This research studied the effects of not only the lections, but also of the type of ownership structure on the performance of commercial banks in the Philippines. Secondary data was gathered from the financial statements found in the Securities and Exchange Commission, Bangko Sentral ng Pilipinas, the Philippine Stock Exchange, and the main branches of banks whose financial statements were not available in the aforementioned. The results of the regression showed that ownership structure indeed affects bank performance as measured by return on assets (ROA), net interest margin (NIM) and overhead cost (cost). Results showed, althuogh insignificant, that public banks tend to be negatively correlated with NIM, and negatively correlated with ROA, positively correlated with NIM, and negatively correlated with COST. On the other hand, foreign banks tend to be significant and negatively correlated with COST, negatively correlated with ROA, and positively correlated with NIM. The proponents found no significant difference during election and non-election periods in the ROA and COST of public and foreign banks. The impact of elections and ownership can be seen in the NIM criterion of a bank's performance. This change, however, cannot be attributed to the use of loans for campaigns, but to the low demand for loans then resulting in lower interest rates.