By DEE K- CHIONG

.Presidenj , Chinn nanking Corporation

On August 16,1920, t he China Banl<ing Corporation fo rmally opened its doors to th

amid t he presence of foreign banks and American ru le.
epublic,
Today , after sixty years and many t rying ti mes, China Bank has become a reputabl
leading commercial hank in t he country which extends wide finan~ia l aid to almost ever Ystable
commercial, agricult ural and industrial endeavor; sets the pace m improved banking Y1'~e Of
serves o broad sector of society through its 22 branches nationwide; and participates s:erv'tes;
10
munity welfore projects, civic acti vities and fund campaigns.
COrn.
Its aut horized capitol stock has grown 50 times over t o P?~O mi.llio.n f~om its initial ca .
stock of P10 mill ion in 1920. Tota l resources reached P3.3 b1lhon, md 1catmg a growth f ~'tal
per cent from t he 1978 figu re of P2.8 bi llion , while its gross income of P381 .7 million~ 5.6
an increase of 21.9 per cent over 1978's P313.1 million.
owed
Dee K -.Chiang, President and Ge n~ral Manager . ~ain~ins t hat Ch.ina ~ank 's outstandi
goal .of serv~ce ~o the peo!lle has made 1t surmount d1ff1cult1es a ~d cont.nue 1ts vital role of ung
holdmg the soc1o-econom1c development of the country. Accordmg t o tum , as China Bank P
itself towards the concerns of the new decade, it will " co ntinue to harness its resources to !lears
the challenges faced by the banking industry," and int ensify its efforts t oward the attainme~eet
its goals for the eighties: higher growth rates, manageable balance of payments, renewed em ~~
sis on agro-based industries, and export-oriented business .
P

CHINA BANKING CORPORATION

60 Years of Fruitfu I Serv1ce

hina Banking Corporation , now on its sixtieth
Cyear,
takes pardonable pride not only in its con-

Manager; Marwin Webster, Secretary-Cashier ; and

Jose Damian , Accountant.
tinued growth but also in the spirit of service to
In 1924, the Bank moved to its building consPhilippine society that it has sustained throughout tructed at the corner of Juan Luna and Dasmariiias
the years. For CBC, the past six decades indeed Streets to keep pace with growing clientele. The
witnessed a fruitful and meaningful existence.
building houses the Head Office to this day.
The records show how, from a struggling bank
On August 15, 1925, it opened a branch in
faced with the perils of a world war, China Bank was Amoy, China and on May 1, 1929, another one in
able to attain its goal of servicing the financial and
Shanghai.
credit requirements of a growing Philippines. It like
During the war years, China Bank was forced to
wise withstood trying times to implement its policy close its doors because it was considered as an enemy
of helping business and industry grow in the country
institution. Dr. Albino Z. SyCip, one of its founders,
and "to successfully make it to the 80's.
now deceased, and the late George Dee Sekiat, who
would later become its President, were both impri
A GLIMPSE OF IDSTORY
soned by the Japanese military authorities who con. The. years followi~g World War I saw the Philip
fiscated all the assets and properties of the Bank.
pmes still under American rule. The economic situa
Then came the battle for liberation of Manila
tion, however, was starting to pick up and attract
during the early part of 1945 which left China Bank
enterprising spirits. With the exception of the Bank of
devastated. Under the management of Dr. SyCip who
the Philippine Islands and the government-owned
assumed the position after Dee C. Chuan 's death in
Philippine National Bank, all the local banks were
1940, the bank was painstakingly rehabilitated. The
branches of foreign banks. As more foreign and restoration of the damaged building, equipment and
domestic trades burgeoned, a need for more domestic
records was not at all a miniscule task. It took the
banks became apparent.
utmost courage of a handful of loyal a nd dedicated
Responding to the call of the times, the late Dee
employees of the bank who helped with the work.
C. Cbuan, lumber T?agnate and philanthropist, and
It was to Dr. SyCip's great relief when he learned
Dr. Albino Z. SyC1p, then a legal practitioner in
of the one factor which would help expedite CBC's
Manila, met with a group of leading businessmen in
resumption of operations: the prescience of the U.S.
lilecember, il9i1.9 at the Oriental Club in Ermita to
Treasury officials who, weeks before the Japanese
discuss the groundwork of the organization. Among
occupation in 1941, gathered the cash of the bank
those present was Oei Tjoe, a wealthy businessman
trom Java who subscribed to, and paid in P1 million of and credited it to its account against the reserves of
th.e Philippine Government in New York.
the capital stock of the bank. Some Filipino Chinese
More than ever, a firm determination to start all
Spanish, American and British nationals als~ becam~
over again triggered a gathering of forces to blot out
stockholders. Their indomitable sp.irit eventually
whatever scars the war had left behind. Having only
found fulfillment In the incorporntion of the bank on
P19,962,270.00 in total resources, the Bank struggled
~July 20, 1920 with an authorized capital stock oP10
for recovery.
million.
Along with its own goal came the task of setting
lllhe bank formally opened for business on
the damaged Philippines back on her own fe et . The
August 16, i1.920 at No. 90 Rosario Street Manila
foremost problem which confronted the country was
with a complete line of banki11g facilities and' services
its dwindling agriculture, trnde, ~'Ommerce und In
to the public. The firsti boar-d of directors was comdustr.y as well as the dourth of food,, clothing, shelter
posed of Dee C. Chuan, Chah.man; A:Iblno Z. SyCip,
and materials. To bring in tho necessary goods and to
Vlce-Chail'man ; Ben1to Sly Cong Bleng, G. A. Cu
generate funds , China Bank extended wide fi nancial
tJnjleng, Carlos Palanca, Dy Buncio, Uy Yetco , Go
aid to importers of the basic necessities of the Fili
J~o , Vlcentl' Gotarnco , Antonio l!.imgenco and Yu
pino people.
Blao Son'tua, members.
From 1946 to the ilrst half of 1950, CBC allotted
The o ~f,Jcers were J!)ee C. Chuan, ~esldenti; Ail'
~66 million for post-war rehabilitation. Then it went
blno
SyOlp, ViceJPresldent; II. W. McFerran, Acting
on to financing large-scale projects and new industries

z.

190

FOOKI EN II'JMES PHILIPPINES YEARB(!)OK 1980

such as those of textiles, foo d, paints, paper, electrical parts and fixtures, cement, plastics, plywood
and steel, and agricultural ventures which would supply the Philippines all the important requiremen~.
These projects eventually contributed to the country 's Gross National Product.
Occurring within the same period were changes in
China Bank's set-up. In 1948, it opened its fm;t loClll
brnnch in Cebu City. Th e following year, its branches
in Amoy and Shanghai were both closed down when
condi tions in China rendered it impractical to con
tinue their operations.
VEillCLE FOR SOCIO..ECONOMIC
DEVELOPMENT
China Bank's dream of serving a broader sector of
business and industry was little by little tulfiUed
through the gradual establishment of its branches.
The Sto. Cristo branch in Manila opened on October
4, 1960. Makati Branch came into being on May ~
1970, followed by the Caloocan Branch on May 1
1973. Another branch started operating in Davao
City on May 31, 1976.
"ded
In its vast financing program, the Bank 11 d
almost every line of commercial, agricul~ml
industrial endeavor, from sm all ventures Ill w to
working, poultry, piggery and cottage industries. of
the production of grains and the manufacture
various products. It also assisted exporters of su~:
copra, tobacco , hemp , logs and other indigenous P
ducts.
. to the
Of equal sign ificance ~re CBC's servu:es il1lted
government and the people in general. It coopern ent
with the Home Financing Commission, ~. ~v~~ build
agency created to help low-income FdiP 111 t;ry's
their own houses. It also geared itself in the co:.~ it
drive towards industrialization ~d ~or w ~vide
pioneered in interbank. syndi~te fm~ncmg ~orked
funds for large.;;cale mdustnal proJects. ti 0 0 of its
with the Central Bank in the impJementa
in une
vurious control and monetary policies, always
with the government 's development program"ro wide!
China Bank would later on prov~ ho:W :rnmUllitY
its commitments were by participating md cBJilPaigJJS.
welftu:e projects, civic activitie~, and fun ovation of
and subsidizing the construction and ren
school buildings.
the Ll~
In 1954., it took part in the project ofrnrnont pro
Wells Association which helped tbe gove

:d.

ft

areas with potable water through the

urces of water supply. The pro j ct
1116 rural
,;tdtructiOD of ;ob the tate Albino Z. Sy Cip, then

e0 1~ pearheade

.:m8Jl

~oard and General Manager. The

ent Project in 1969 likewise roCIIJll 006 Resettlemort of China Bank in helping the
full supP
coi~:indige~t res~:~~ding goal of service to the
arf)ll 'l'tUlY , ,ts dou CBC stand amidst difficulties and
pie b~ mavi:al role of upholding the socio~t.inue deve
ts 1 pment of the country.
cO"
o
ee0nonllc UPGRADING CBC's SE~VICES
f th leading commermal banks, CBC was
0
As one . -~ roved banki ng services. It had set
a pace: ; :r J~~ifory and equipped itself with th e
up a
. ss machines.
~atest bUS106; 1't procured and installed the I BM SysJn 19 8 ' ntplex com puter system designed to
telllf360,
:ng of transactions. The sai d compu ter
(8cilitate h~BC the prestige of being the very first
earned f~ theast Asia to process both savings and
IJallk l)l
u nts " on line".
current accou t o this China Bank was also the first
eorotlarySo theast Asia t o do " multiprogramco!DpanY m ~ter system , and the fust company in
JDing" on comp to operate o n line with a thirdPhilippwes
tbe . computer.
generat!o~ rsion from the conventional methods of
'ibiS ~:atures speedy processing of about 150
operations nsactions involving demand and savings
types . of :d instant updating on savings accounts.
depOSits,.
""cation of account balances and in!DatJC veru'
/!.U to
terest
up dat'Jn g on sa\1ngs accounts are also made
wJIS

of the

()1r<l the

passible. t rization has blotted out the incone CBC's clientele in depositing or with.Compuf
0
veruence they may now do so in any of the Bank's
draWIDg~a offices. Through multi-programming,
Metro
us "off-line" jobs like the payroll, general
sunuttaneotatistics and periodic records for the head
ledger, s
d tak
office and the branches are un er en.
CHINA BANK TODAY
Despite staggering price increases, the presence of
n08ti0 g rate and worldwide inflation, CBC has
d to ;urvive and to remain one of the oldest
:f!mng commercial banks in the c01~1!-try.
It has upheld a reputation for stability, proof ?f
which is in its annual financial reports. La~t year, 1ts
gross income of P381. 7 million showed an mcrease of
21.9 percent over 1978's P313 .1 million.
__
Total resources amounted to P3.3 billion,
showing a growth of 15.6 per cent from the _ 1~78
figure of P2. 8 billion. Loans grew to ~L 94 billion,
abetted by a broad dep<isit base amountmg to PL45
lillian.
Total investments increased by P50. 7 million, or
11.7 per cent over the previous year's P434 million .
Trading account securities were recorded at P39~.9
million as of December 1979, as compared w1th
1'96.1 million in 1978.
Cash dividends distributed to stockholders
summed up to 1'9.4 million, an allotment of P4 .70
per share with return on equity at 18.5 per cent.
At present China Bank has a total of 22 branches
to keep up with its program of expanding se~ices _to
a broader section of society, It now serviCes 1ts
glOwing clientele in the following branches: Cebu;
sto. Cristo; Makati; Caloocan; Davao; Greenhills;
~~o; Legaspi Village; Quezon Avenue; -~otgueras;
~uapo; sta. Ana (Davao City); Manali~ and
llaJnos, both in Cebu CJity; Masangkay; ll01lo; Pasay ,
San Fernando, Pampanga; Valenzuela; Cagayan de
Oro ill\d Dagupan City. Before the year ends, two to
lhree more bW!ches will htve oeen opened.
The increase in the number of branches has
helped bolster the bank's resources. Last year, the
branches alone !:!!Derated total deposits amounting to
:-ethan a third of the bank's total deposits of P1.5

Anthony Dee K. Chiong, Jr. James Chua

image. (Above are the members of the present Board
of Directors.)
It recently organized an allied undertaking, the
CBC Finance Inc. which was incorporated on March
21 1980. Its' immediate goal is to serve as a medium
fo; providing factoring, discounting, leasing, and
direct lending services. Five of CBC's directors sit in
its board: Robert Dee Se Wee, Dee K-Chiong, Gilbert
Dee PeterS. Dee, and Anthony Dee K-Chiong, Jr.
' China Bank's .latest venture in international
finance is the Manila CBC Finance (Hong Kong) Ltd.
Organized last June, 1980, it functions as a merchant
bank to carry on all or any of the businesses of
borrowing, raising, lending, advancing, managing,
securities and property, discounting, buying, selling,
promissory notes, underwriting, and negotiations of
loans among a host of other services. CBC has an
equitY participation of 53' per cent in the company
and has five of its directors and officers concurr~ntly
involved in the company. They are : Dee K-Ch1ong,
Gilbert Dee, Peter S. Dee, Edward Dee Se Kiao and
_
Reynatdo L. Lao.
China Bank today is faced with bigger challenges

Edward Dee Se Kiao

Florentino del Rosario

posed by the current changes in the banking arena.

But with the continued dedication of both its officers
and employees, CBC is confident to reach greater
heights as it stands in the threshold of the '80s.
THRUSTS FOR TIIE '80s
CBC is geari~g itself towards the concerns of the
new era. In the banking and financial community , universa! banking or unibanking has become the ultimate
direction. Cognizant of the added solidity it can provide the Bank, CBC bas organized the two allied
undertakings above-mentioned.
In its desire to reach a wider expanse, the bank is
also studying the feasibility of engaging in other
spheres of business such as brokerage, warehousing
and trucking.
It regularly conducts training and development
courses for its staff to equip them with the necessary
knowledge in the face of competition and complexities in banking.
It is envisioned that five years from now, the
bank's headquarters will move to Ayala Avenue in
Makat; _ Situated on ~ 1? ,000-squ~e m~ter lot, the
Chma Bank Tower w1ll me 32 stones htgh , the new

_ _:__ _ _ _ _ _ _ _. PAST PRESIDENTS OF CHINA BANKING CORPORATION---------.....

F:

!On.

CBc is presently 78 per cent Filipino-awned, the

~ by Chinese,

American, British, Spanish and other

llltiOnaJ.ities. It is of importance to note that the
~ized capital stoc._k has groWJJ 50 times over to
~ lllllli9n !rom its i,"'itial capital stoc~ of P10
~ in 1920. The Bank~paid-in c~p~tal mcreased
P20'T mi11ion last Year P248 million.
_
tile In its long-standing "' I of servicing the people m
beat way
. &oa Bank bas taken longer
ltr1des Which
banish its C:@llservative

=~~~:to

The late Dee C. Chuan

The late Albino Sycip

Tite late George Dee Scld.at

1980 FOOKIEN TIMI'S f>UlLIPPINI'S YliARBOOK

191

ce n ter o f im p ved and renewed

services.
otwithstanding the present secnario of worldwide recession , t he unpredictable moves in the int matiOJ1al
political front , and the dim forecast for
the years ahead, China Bank faces the
thru ts of the SO's with an optimistic
perspective of expansion and growth
and a renewed commitment to serve the
financial needs of our society.
China Bank will continue to harness
its reso urces to meet the challenges
faced by the banking industry, parti
cularly the adoption of the universal
banking system in the country 's finaucia! system .
As a potent vehicle for socioeconomic development, the bank shall
intensify its efforts toward the attainment of the goals for the new decadehigher growth rate targets, manageable
balance of payments, renewed emphasis
on agro-based industries and exportoriented business.
No less than Central Bank Governor
Gregorio S. Licaros himself lauded the
performance of China Banking Corporation : that it has adhered to its policy of
helping finance both small and big
enterprises and of actively participating
in the government's development programs in all its sixty year.; of service.
Indeed, for China Bank, corporate
existence is not merely reckoned with in
. terms of absolute values but by the
impact of its existence as an entity committed to service and to the progress of a
develo ping economy.

BARRIOS
(From Page 186)
Emphasis will be placed in the

future on a service orientation, positive

thinking, faster rhythm of work, and a
sense of competitive spirit. Fee-based
activities will grow in relative importance over the yean.
To be effective, financial institutions can no longer rely on a steady
flow of borrowers, a situation that refleets a gap between the demand for and
aYllilability of funds in the system. To
generate high quality clients and feebased income, financial institutions have
to break out of their enclaves and reach
out for new markets.
These profound changes imply a
mdical reformulation of the managerial
and other human resource requirements
of fmancial institutions. More and more
e_mphasis will :be placed 011 profesSlonallsm and skills. Even the organiza.
tiona! structures of financial institutions
need to be redefmed to cope with
c~anging markets and pressures. Traditiona! forms of delivering services to
clients will have to he restructured.
Is it realistic to assume a radical
change in attitudes among those consti
tuting the top leadership in the fmancial
system? Managing change will he partly
facilitated in tbe future given the relatlve age structure of chief executives
~d Uu;, anticipated retirement of traditiona! giants". Tbe resulting realignment of forces will be a function of
perceived optimal Institutional structuzes and best fit for the Jlelllonalltl
e&
concerned.
IMPUCATIONS FOR Bum.n.....
......,"'-'

What is the algnifit:ance of unJ.

banking to the IISelll of funds? The
greatest concern of the busines sector 1a
the fear of inordinate concentration of
economic power. The authorities are
hopeful that proper safeguards have
been lmposecl on EKBs and other lnstl
tutlollB to diffuse economic power.
Whether or not unlbanldng will

l'(lsult In lower cost of capital Is ciitflculL EKBs can make their presence felt in
to predict at this stage. There nro other tho finan cial syste m.
forces, such as worldwide Jn fiailon and
In the meantime, the enhanced
dist\Lrbnnces on ex lornal oqulllbrium,
capacities of Investment ho uses and
thnt complicate the goul of loweri ng the
thrift banks would enable them to gain
~'Ost of capital.
Whnt hilS been tho experience of momentum and deepen market penetraother countries In relation to power tion.
concentration and efficiency? Coun'l'ho nggressive and concerted effort
tries characterized by unlbonking Rtruc of Investment houses in putting together
turcs have tendocl lo exhibit a fnlrly projocL financing packages would lead
high degrae of lnvolvomont of unl to a signifi cant Imprint In the financial
banking institutions In business nffnlrs. community. ln the long-run , Investment
The concern over power concontro Llon houses will have to make strategic
has been most pronounced In West moves to reckon wlth t he integrate d
Germany which has initiated moves to powers of EKBs.
limit the extent of business involvement
of unibanking institutions.
Pr ofessi o nall y-run t hrift InstiAvailable literature suggests that t utions, with aggressive deposit genecommercial banking spreads have been rating programs, will continue to carve a
relatively high in unibanking countries. niche in the system.
The International Finance Corporation
(IFC) estimates the commercial bank
By the mid-1980s, one can expect
spread ratio at 3.4 per cent for West the emergence of dominant EKBs and a
Germany, 3.2 per cent for Netherlands, h a nd f ul of independent financial
and 3. 7 per cent for France. The cones- groups.
ponding ratio is estimated at 2.4 per
Some people do not take the uni
cent for Korea, 2.2 per cent for Japan,
2.8 per cent for Canada and 3.2 per cent banking reforms seriously. They are disfor the United States - countries counting any significant transformation
characterized by the separation of com- in the system. People who share these
mercia! banking activities from invest- views grievously err in judgment. The
scenario for the second half of the
ment banking powers. 1
It would be a challenging task for decade will bear this out.
the authorities and responsible members
Whether or not the objectives
of the fmancial community to ensure behind universal banking are achieved
that economic opportunities are ade- would depend on a number of premises.
quately diffused and the cost of capital
is realistic and reasonable, reflective of The first important consideration is
democratic processes and opportunities. some measured degree of interest rate
Would the ability of EKBs to go stability in the sYStem. A financial
into equity investments lead to a sub- sYStem that is characterized by quantum
stnntial increase in equity or venture changes in the level of short-term in
capital? It is doubtful whether this terest rates will tend to exhibit a relaevent would come about as there is a tively undeveloped capital market and a
natural selectivity in equity investments. limited supply of long-term capital.
Relevant to the consideration of
A second important consideration is
equity investments are such aspects as an environment with manageable infla.
acceptable financial performance and tion. Systems characterized by strong
condition, dividend record, and the inflationary elements exhibit a modest
extent of equity involvement of out- supply of long-term capital and un
sider interest. The prototype banker is developed capital market institutions
concerned with solvency and liquidity. and instruments.
The more _aggressive EKBs may be able
to generate investible equity funds but
The development of a capital mar
these would tend to flow to friendly or ket can he consistent with some rea
tested ventures.
sonable level of inflation if interest rates
If the environment for under- are relatively free to seek their own
writings does not materially change, it is levels. Interest rate flexibility of longreasonable to expect that the under- term financial instruments can be recon
writing activities of EKBs will be modest ciled with changes in short-term interest
and selective.
rntes if long-tenn yields are expressed as
a margin above a benchmark such as the
IMPUCATIONS FOR INVESTORS
yield on short-term prime commercial
There is some expectation that the papers. (Ulre must be exercised that a
greater interplay of competitive forces MIBOR-type pricing mechanism does
will lead to higher rntes of return for not represent an equivalent yield
investors and savers, accompanied by substantially lower than the yield on
broader investment possibilities over prime commercial papers. Otherwise,
time. In any environment characterized term transformation will forever be an
by inflationary pressures, specific policy elusive goal.)
measures and programs should be deFinally, the successfUl advance ~d
signed to induce a
in the savingS rnte
by providing reasonable real returns for expansion of financial markets will
savers. Measures that are addressed to depend, Irrespective of the countries
real returns for investors have far greater concerned, on the degree of business cer
Impact than programs designed simply tainty and positive posture about the
to increase public awareness and deve- future.
We have seen a revolution of nnan
lop savings habits.
There Is likewise the expectation cia! ideologies and strategies. We can
that the freer market Interplay in the expect to witness a decade-long
system will lead to Improved banking evolution of financial structures and
services. The end' users of funds and pmctlces.
savers will he the targets for more e.f!ectlve delivery systems.
1 David Gill ... Banks and Securit ies Marke~s:
TRAJECTORY
Will there he an Immediate major Some Thoughts ..., on Evaluating Financ1al
tmniformatlon in the financial system? System Depth and Efficiency" (a paper
before the First International ConGiven the hurdle level of P50@ mil delivered
ference on the Financial Development o f
llbn P*tdIIJ! ca,pltal requirement for Latin America and the Caribbt!an. Februarv
EIO!e, it wO!Ud ~ 3 to 6 yelllS before 26-28, 1979).

192 FOOKIEN 11MES PHJUPI'INilS YEARBOOK J980

rue