Philippine Rural Banks and Regional Economic Development

27 Pages Posted: 25 Aug 2008 Last revised: 17 Sep 2008

See all articles by Céline Meslier

Céline Meslier

Universite de Limoges, LAPE

Jessica Los Banos

University of the Philippines, Diliman

Emmanuelle Nys

Université de Limoges, LAPE

Alain Sauviat

Université de Limoges, LAPE

Date Written: August 25, 2008

Abstract

This paper examines the link between financial and economic development at the regional level in the Philippines and focuses on the role played by rural banks in regional economic activity. We apply cointegration panel data analysis on regional banking and economic data for the period 1993 to 2005. We ranked the sixteen regions in three different groups depending on their average economic development. The wealthiest the region is the more important financial depth is. Our results do not support a strong evident relationship between regional financial and economic development in the Philippines. However, our findings highlight a positive effect of the presence of rural banks on economic development which is stronger for the intermediate developed regions than for the less developed regions, suggesting the existence of a threshold effect.

JEL Classification: G21, O16

Suggested Citation

Meslier, Celine and Banos, Jessica Los and Nys, Emmanuelle and Sauviat, Alain, Philippine Rural Banks and Regional Economic Development (August 25, 2008). 21st Australasian Finance and Banking Conference 2008 Paper, Available at SSRN: https://ssrn.com/abstract=1253502 or http://dx.doi.org/10.2139/ssrn.1253502

Celine Meslier

Universite de Limoges, LAPE ( email )

5 rue Félix Eboué BP3127
LIMOGES, 87031
France

Jessica Los Banos

University of the Philippines, Diliman

Asian Center, Romulo Hall
Magsaysay corner Guerrero Sts.
U.P. Diliman, Quezon City, 1100
Philippines

Emmanuelle Nys (Contact Author)

Université de Limoges, LAPE ( email )

5 rue Félix Eboué
BP 3127
Limoges Cedex 1, 87031
France

Alain Sauviat

Université de Limoges, LAPE ( email )

5 rue Félix Eboué BP3127
LIMOGES, 87031
France

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