DOJ cautions banks on industry-wide adjustment in ATM withdrawal fees

03 October 2013

The Department of Justice through its Office for Competition (OFC) today issued a statement on the intended industry-wide adjustment in automated teller machine (ATM) fees and charges.

Several banks announced an increase in inter-bank ATM withdrawal fees to P15 which was halted by the Bangko Sentral ng Pilipinas (BSP).  

Metropolitan Bank & Trust Company (Metrobank) and its subsidiary Philippine Savings Bank (PSBank) made its announcement on 1 August 2013 that it will increase its interbank withdrawal charge from P11 to P15 claiming that the increase is due to an adjustment in network-determined interchange fees charged by other banks.

Following Metrobank and PSBank's announcements, Security Bank declared on 14 August 2013 that it shall also increase its interbank withdrawal charge from P10 to P15 without providing any reason.

On 26 September 2013, BDO Unibank, Inc. (BDO) made it known to the public that it will increase its interbank withdrawal charge from P11 to P15 purportedly due to an industry-wide development to basically cover the cost of operating ATMs.

On the other hand, Bank of the Philippine Islands (BPI) announced on 19 August 2013 that it will increase its interbank balance inquiry charge from P1.50 to P2.00. According to BPI, the increase is necessary to enable it to maintain its service standards even for transactions using other banks' ATMs. It claims that since the last fee adjustment in 2005, the cost of enabling interbank/internetwork ATM withdrawals and related services have escalated.

The aforementioned banks, except Security Bank, all have a P2.00 interbank balance inquiry charge. 

BPI had already increased its interbank withdrawal charge from P11 to P15 last year.

"We believe that there is a need to increase transparency in the imposition of interbank withdrawal charges. Raising consumer awareness on which banks charge the lowest fees and why they are paying such fees will lead to an informed choice and will promote greater competition among banks. In this regard, we strongly caution banks to ensure that there is no coordinated action on their part to increase their inter-banking charges without any link to the costs of their operations and pass these charges on to their customers as this may be deemed anticompetitive conduct," said Secretary Leila M. De Lima.

Under the law, anticompetitive actions, such as monopolies and combinations in restraint of trade, are punishable by a penalty of prision correccional in its minimum period or a fine ranging from P200 to P600, or both.

The DOJ-OFC headed by Assistant Secretary Geronimo L. Sy was established by Executive Order No. 45, series of 2011, which designated the DOJ as the Competition Authority with the mandate to among others, supervise competition in markets by ensuring that prohibitions and requirements of competition laws are adhered to, and to this end, call on other government agencies and/or entities for submission of reports and provision for assistance.



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