BPI sees lending to SMES to grow on tepid inflation

THE Bank of the Philippine Islands (BPI) sees its loan book for small enterprises expanding by 10 percent this year on the back of stronger consumer confidence driven by the country’s stable economic performance and easing inflation.

Dominique R. Ocliasa, head of BPI Business Banking, said his segment’s loan book to small enterprises, which have an annual income of P3 million to P50 million, would track the projected industry growth of 10 percent this year.

Ocliasa noted that BPI’S loan book to the small enterprises last year rose by an annualized rate of about 40 percent to around P12 billion.

BPI’S annual integrated report for 2022 showed that it lent P12.1 billion to 112,000 small-sized and medium-scale enterprises (SMES) clients last year.

“We are going to dovetail to the prognosis of the industry, which is a 10-percent increase. We are going to do better than that; that is both in number of clients and loan book,” Ocliasa told reporters on the sidelines of the launching of the BPI segment’s online platform for SME loan applications.

‘Plateauing’ rates

OCLIASA’S optimism stems from the country’s easing inflation rate and the “plateauing” of the Bangko Sentral ng Pilipinas (BSP) policy rates coupled by “renewed ” consumer confidence.

“Policy rates as against inflation, for the first time, are moving close to each other. In the past, inflation has been leaving policy rates behind. It is an indication for us that maybe interest rates are on the way down—at the very least plateauing, which would be very good for business in general,” he said.

Last month, the BSP decided to pause its aggressive monetary policy tightening campaign as it believes that inf lation is now “firmly on track” to hit the government’s target. (Related story: https://businessmirror.com.ph/2023/05/19/bsp-pauses-interest-rate-hikes-as-inflationcools-and-consumer-demand-eases/) The country’s inflation in May, which measures the rate of increase of prices of goods and services, further slowed to 6.1 percent from 6.6 percent in April.

‘Acquisition tool’

BPI’S plan to expand further its print in the SME market got a fillip last Tuesday with the launch of its digital platform.

“We are seeing increased interest among SMES in harnessing on-demand technologies to become more agile and flexible in pursuit of their business goals,” Ocliasa said.

He added the lender believes the digital platform, called “Ka-negosyo On The Go” (KOTG) would allow BPI to reace more SMES nationwide “because it is online and accessible from anywhere.”

The lender said the platform contains various services such as loan eligibility checker, loan application proper and loan calculator, among others.

Prospective SME borrowers can apply for loans through the platform without the need of going to a physical BPI branch. The platform would also allow them to monitor the status of their applications real-time.

Ocliasa described the bank ’s digital platform as an “acquisition tool” as he sees it bringing a fourth to a half of the Business Banking segment’s loan portfolio in the future.

He noted that extending loans to the SMES is critical to economic growth as these enterprises account for 63 percent of the national workforce and 40 percent of the country’s gross domestic product.

Ocliasa also disclosed that the Business Banking segment is already working with BPI’S Agency Banking segment to bring KOTG to the an e-commerce platform. (Related story: https://businessmirror.com.ph/2023/02/01/bpi-eyes-clientsvia-deal-with-lazada/)

BPI’S stock price closed at P102 apiece on June 6, P1.30-higher than its previous close of P100.70 on June 5.