BPI sees stronger credit growth

Bank of the Philippine Islands (BPI) expects a robust growth in credit this year amid the country’s economic expansion and the planned interest rate cuts by the Bangko Sentral ng Pilipinas (BSP).

BPI chief finance and sustainability officer Eric Luchangco told reporters yesterday on the sidelines of the media launch of BPI Green Solutions that the Ayala-led bank is moving more toward consumer mix.

Luchangco said the share of corporate versus consumer in its borrowing mix has declined to about the mid 70 percent from the high of 70 percent.

“We’re looking for that to continue to grow over time. Consumer and SME (small and medium enterprises), we’re looking to continue to grow. And then we think there’s a lot of untapped opportunities for us on the consumer and SME side,” he added.

In terms of total loan book, Luchangco said the overall perspective is to be stronger this year.

“The main driver for that, we think, is primarily basically our customer optimism. I think generally in our conversations with customers, I think they’re feeling that 2024 is going to be a better year from an overall GDP (gross domestic product) growth perspective. And that’s also our expectation,” he said.

The Philippines still emerged as the fastest growing economy in the region despite the slowdown in GDP growth to 5.6 percent last year, lower than the government target of six to seven percent, from 7.6 percent in 2022.

He explained that BPI Green Solutions is part of how the bank wants to grow its business.

“I think overall we see the economy as a whole continuing to grow, and that will help drive our business. So not just these Green Solutions are more, again, as we were talking about, it’s more retailoriented, more for our consumer. But the overall growth we see happening both on the consumer side and on the corporate side as well,” he added.

BPI’s loan book went up by 10.5 percent to P1.9 trillion in 2023 from P1.7 trillion in 2022 due to strong growth across all portfolio.

Luchangco said the bank also expects the BSP to start cutting interest rates in the second half of the year as inflation continues to ease after breaching the central bank’s two to four percent target range for 20 straight months. Inflation quickened to six percent in 2023 from 5.8 percent in 2022 despite easing to a 22-month low of 3.9 percent in December from a peak of 8.7 percent in January last year.

“Our current expectation is that locally rates will start to come down in the second half of the year. And so we’re just continuing to monitor the situation. A lot of time before now in the second half,” he added.