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BSP keeps hands off ATM fee hike

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MANILA – The Bangko Sentral ng Pilipinas is keeping its hands off Bank of the Philippine Islands’ decision to raise by 50 percent its automated teller machine transaction fee.

BPI last week announced that it would charge non-BPI cardholders P5 more when using any of the bank’s 1,900 ATMs across the country. The fee hike would take effect October 22. Before the increase, BPI charged P10 for every transaction.

“They obviously have to deal with negative customer reaction who are free to decide to take their patronage elsewhere,” BSP Deputy Governor Nestor A. Espenilla Jr. said, referring to BPI.

He said non-BPI cardholders however “have many other options.”

Espenilla said higher maintenance costs played a critical part in the bank’s decision. “Maintaining ATM services is not costless. Cost was clearly a factor,” he said.

But while banks like BPI are free to make appropriate cost adjustments as and when they see fit, regulators may intervene in those cases when industry-wide collusion is suspected, BSP Governor Amando M. Tetangco Jr. said in a text message.

“If they find the price increase unreasonable, perhaps choices with respect to other banks can be considered. But when the industry as a whole raises their rates, this is typically where the BSP checks if it looks like collusion,” he said.

Pascual M. Garcia III, president of Philippine Savings Bank, said the increase in the ATM transaction fee stemmed from the decision of the BSP to exclude from the deposit reserve those funds deployed in ATMs. The exclusion meant that money in ATMs no longer earn interest for the bank.

“Cash held in ATMs are no longer reserve eligible so we incur interest costs for keeping them in ATMs until they get withdrawn,” Garcia said.

Aurelio R. Montinola III, BPI president, had said the cost is significant since the bank deploys P2 billion everyday to replenish ATMs.

He said the amount of money deployed is more than twice during long weekends and on holidays.