A developmental study of the stock savings and loan associations in the Philippines

Statement of the Problem: Despite the apparent growth of the system, the stock associations are confronted with problems which pose serious threats to the industry. Some of the difficulties are inherent to a comparatively small organization like the stock association. In certain cases, they are influenced by factors which the system has very little or no control at all. Others however may be attributed to the social values and personal preferences of the people that run the organization.The major problems of the industry are presented below:1. The problems of low profitability. For the year ending December 1979, the industry\u27s net income ratio of 6.6 percent was only about one-half of the entire banking industry\u27s ratio of 12.6 percent. This was the lowest among thrift banks and next to the government specialized banks, the second lowest among all categories of banks.2. The difficulty of complying with several regulatory requirements such as the capital build-up program and other demands common to a highly regulated industry as banking.3. The competitive pressures and threats arising from the recent banking reforms. With the removal of the several inherent advantages brought about by specialization and the new direction towards bigness, stock associations are now pitted on equal footings with the financial giants. Methods of Approach: The study made herein was based principally from data gathered from the following sources: Books, magazines, newspapers, speeches/messages, theses, annuals/ periodic reports on the subject, laws, circulars, rules and regulations promulgated by competent authorities. Method of approach in solving the problems of the industry evolved from interviews with officials of the Central Bank, the Philippine League of Savings and Loan Associations, Inc. and from personal knowledge and experience as a bank examiner of the Central Bank, Department of Rural Banks and Savings and Loan Associations. Findings: The stock association\u27 industry is now facing several problems. One major difficulty i