PH bankers remain optimistic amid expected headwinds

The Philippine banking industry remained optimistic about local economic prospects amid global uncertainties and market volatilities, according to the results of the Banking Sector Outlook Survey for the first semester of 2019, the central bank said on Thursday.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said majority of the respondents in the semiannual poll of bankers projected the gross domestic product to grow between 6 and 7 percent in the next two years.

“Similarly, the outlook on the Philippine banking system remains stable, with most of the respondents projecting double-digit growth in assets, loans, deposits and net income,” the regulator said. “The bullish outlook on the banking system indicates that banks will continue to provide an environment conducive to the sustained domestic economic growth.”

Amid some expected headwinds, the survey showed that banks intended to maintain riskbased capital and liquidity well beyond domestic and global standards, with high-quality common equity (or “tier 1” resources) dominating the banks’ capital.

Meanwhile, the banks’ projections on the Basel liquidity metrics of liquidity coverage ratio and net stable funding ratio were expected to provide ample short-term and long-term funding to weather market volatilities while taking advantage of the opportunities presented by the growing economy.

In terms of financial products or services, majority of the respondent banks mentioned that corporate and retail banking would remain as their top most priority followed by payments services.

At the same time, the new survey section on financial technology and cybersecurity plans underscored the banking industry’s aptitude on the use of technology-enabled solutions and strong interest in participating in the digital finance ecosystem—an element that is expected to add further impetus to the growth and operational efficiency of banks.

The report also noted most of the banks planning or already employing technology in their operations found its most important application in areas of data security and privacy, know-your-customer procedures and loan scoring.

Meanwhile, institutional risks such as cybersecurity threats were considered the top concern.