Postbank Marks 109th Founding Year

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Published:  MANILA BULLETIN - Business News
May 24, 2015

The Philippine Postal Savings Bank, rebranded as Postbank, marks its 109th birth year anniversary today.  The Bank was founded on May 24, 1906 to bring banking services to the rural areas and to enable the Philippine government to tap and mobilize the savings in the countryside.

Since it was established, Postbank has operated almost continuously except for two major interruptions, during the Japanese occupation in the 1940s (World War II) and the declaration of Martial Law by President Ferdinand Marcos in the 1970s.  The Bank was formally reopened in 1994 by President Fidel V. Ramos as a wholly owned subsidiary of the Bureau of Post, following the latter’s transformation into an autonomous chartered corporation renamed “Philippine Postal Corporation” (PhilPost).  This was in line with its Medium Term Corporate Plan, among whose goals was to develop the rural financial sector to ensure adequate supply of credit to the Philippine countryside.

Since it reopened, Postbank operated viably but unremarkably, recording small improvements in profitability as it pursued traditional banking operations much like a private rural bank.  In 2011, however, financial problems started to emerge, prompting the appointment of a new management team to turn it around.


The new management team appointed by President Benigno Aquino, which was headed by Cesar N. Sarino—former Department of Interior and Local Government secretary and Government Service Insurance System president—prepared a Strategic Plan for 2012-2016 to turn operations around upon instruction of the BSP and immediately proceeded with its implementation.

From an almost breakeven operation in 2011, the net profit increased six-fold to P30 million in 2012, and in the following year, the profitability almost doubled to P59 million.  While this was almost miniscule compared to what large banking institutions normally make, it represents in relative terms a significant uptick, a turnaround, so to speak.

Based on its annual report in the past year, 2014, Postbank again doubled its previous year’s record, registering a net profit of P123 million.  The other financial indicators likewise increased.  The Bank’s total assets increased from P7.2 billion in 2013 to P9.1 billion in 2014.  Its total deposits grew from P6.3 billion to P7.9 billion during the same period, and its loan portfolio performance rose from P4.4 billion to P5.7 billion from 2013 to 2014.  All of these figures have been increasing annually since 2012.

These financial improvements represent the composite of measures in the various facets of governance and management.  Highest priority involved tightening the controls in the few areas where corruption had earlier taken place, and going after the perpetrators.  Next was to provide a better workplace, including the acquisition and restoration of the building headquarters, which was razed by fire a couple of years back.  A cost reduction program was subsequently effected.  Even as Postbank developed the details of its major programs, it started gearing up organizationally, operationally and financially.

The Management Organization System was revised, and key management appointments were made.  Gaping holes in the HR, credit management, marketing and sales functions, etc.  were plugged.  Operationally, the policies, systems, and procedures and the mechanics for their implementation—including the completion and updating of the requisite manuals—were made.  A monitoring and evaluation system was put in place.  More innovative and aggressive marketing strategies were developed through planning sessions and workshops.  An employee welfare and benefits program was developed and is now being implemented.


As Postbank was improving its operational structure, it reviewed its product line and started developing new ones geared towards its countryside shift as enunciated in the strategic plan earlier submitted to the BSP.

Postbank president Sarino had indicated that he wanted the Bank to stand out as the countryside bank.  “I would like to be able to impact people directly;  I would like to be there where help is most needed and do it profitably.  This will give us satisfaction.  I feel that this is the right way to do it.  It requires patience, but you get the satisfaction that you can do something even with limited resources.”

Sarino has initiated the formation of a nucleus of countryside development banks collectively under the Postbank umbrella.  They will engage in micro-finance from post offices and LGU offices following a programmed installation timetable until such time that they will be able to merge into a potent network of banking institutions.

The first six micro-finance offices in the unbanked and underserved areas of the country started operation in April 2014—two in Albay, two in Camarines Sur, and two in Pangasinan.  They are now being pilot-tested, with the results being used for the implementation of the succeeding microfinance offices.

Another product that Postbank will offer to clients in 2015 is its new remittance services.  Under this new system, foreign and domestic remittance services will be made available in partnership with the Philippine Postal Corporation and other conduits such as pawnshops and other merchandise and service outlets.

Another new service of Postbank this year is the release of its cash cards to payroll clients, loan borrowers and remittance beneficiaries.

The bank also plans to expand its ATM installations, putting up as many as 200 ATMs in accessible areas such as LGU centers.

Postbank will likewise offer a point of sale (POS) system to deliver cash requirements of its clients.  This project aims to use the POS units as alternative to the more costly ATMs in disbursing funds to account holders through the branch, MBO and third party outlets.


Postbank is strengthening its core banking service not only to sustain operations and remain financially viable but also to generate capital to be able to fund its pioneering ventures.  Within this lending category, it shall give preferential attention to those with a service of developmental component, those which can appropriately contribute to promoting community development and welfare, generate livelihood and employment, and help provide the basic human needs such as food, clothing and shelter.

Sarino considers his stint at Postbank (and concurrently as chair of Philpost) as exciting and satisfying, like his humongous work at the DILG and GSIS.

“Presently, I am literally rubbing elbows with the masses of people who are lifeblood of our nation.  To be able to make a difference in their lives is food for the mind, heart and soul.”