During the Japanese
occupation period (1943-1944), all loans were liquidated
with Japanese war notes. Coupled with severe inflation,
said era caused a complete breakdown of the banking
structure of the economy. These setbacks and other
ravages of war which damaged about 70% of the records
of the PSB crippled its operations.
To enable the economy
to recover, Executive Order No.48 was issued on 6
June 1945 to pave way for the reopening of the pre-war
However, it is only
in 1946 that the PSB resumed service in Manila. Starting
with only 15,737 savings deposits accounts with a
total value of P4,104,223, the bank rapidly grew with
deposits jumping to P14.4 million in 1947 (250% increase),
P25 million in 1948 (74% increase), and P33 million
in 1949 (32% increase). Moreover, as a result of thrift
campaign conducted by the PSB, demand for savings
banking services increased which opened up opportunities
for the expansion banking facilities.
In 1960's the private
banking sector, especially the rural banks, rapidly
grew while the operations of the PSB deteriorated
due to the shift of its clients to private banks
because of higher interest on savings deposits offered.
Nonetheless, the PSB was considered unduly competing
with the private sector and was thus dissolved.
In view of this, Pres. Ferdinand E. Marcos issued
the Presidential Decree No. 121 dated 29 January
1973 mandating that : a) PSB branches shall not
be established in places where banking services
are already available; b) one year thereafter, existing
PSB operations maintained in such places shall be
completely discontinued; and c) within three years
from the said date, all operations of the PSB shall
be completely discontinued.
On January 1976, the
PSB was finally phased out with the Philippine National
Bank (PNB) serving as its liquidator pursuant to provisions
of P.D. No. 241.
Among the powers granted
to the Philippine Postal Corporation (Philpost) under
Republic Act No. 7354 was the power to reopen or reactivate
the Philippine Postal Savings Bank (PPSB).
On 24 August 1993, Postmaster
General Eduardo P. Pilapil appointed Mr. Beatroz Alaan
as Consultant for the reopening of the Postal Savings
On 05 October 1993,
Postmaster General Pilapil requested the Bangko Sentral
ng Pilipinas, through Deputy Governor Feliciano Miranda,
Jr. for an authority to reopen the defunct Postal
On 23 October 1993,
the Philpost Board of Directors passed Resolution
No. 93-119 approving PHILPOST 2000, the Medium Term
Corporate Plan of the Philippine Postal Corporation
(1994-2000). Among others, said corporate plan states,
“Pursuant to the Macroeconomy and Development
Financing Policy stipulated in the Medium-Term Philippine
Development Plan 1993-1998 to “Develop the rural
financial sector to ensure adequate supply of credit
to the countryside,’ the PHILPOST shall re-establish
the Postal Savings Bank as a subsidiary.
the earliest possible re-opening of the PPSB, Postmaster
General Eduardo P. Pilapil directed the conceptualization
of the reactivated PSB’s thrust, priorities,
programs and operational framework and the preparation
of documents required by the Bangko Sentral ng Pilipinas
(BSP) for the issuance of an authority to re-open
the PSB in favor of Philpost.
On 21 July 1994, the Philippine Postal
Savings Bank was re-opened by former Pres. Fidel Valdez
Ramos in a simple ceremony held in Malacañang.