RCBC unit sees stronger credit growth

The thrift bank arm of Yuchengcoled Rizal Commercial Banking Corp. (RCBC) said it expects stable interest rates to drive bank lending growth this year.

RCBC Savings Bank president Rommel Latinazo said sustained economic growth and easing of interest rates could boost the banking industry’s loan portfolios this year.

Latinazo said that while higher interest rates have weakened the consumer’s willingness to subscribe to financing vehicles and signing real estate deals, there is still demand for these goods as the economy continues to swell.

He said the country’s gross domestic product (GDP) growth would stay above six percent this year supported by robust remittances from overseas Filipino workers.

“The Philippine GDP is still forecast to grow over six percent in 2019 to be driven by continued OFW remittances and public spending. This economic growth will continue to support the consumer financing business. While the slowdown in the last quarter of 2018 was due to the rising interest rates, we expect easing of the interest rates which will drive buyers to acquire new motor vehicles,” Latinazo added.

Latinazo also cited the rising employment level that could fuel the consumer financing businesses of banks. “As the economy grows, we expect the middle-income sector expanding which is the target for consumer financing,” he said.

The BSP study also revealed that Filipinos have a stronger intention to buy real estate items in the next 12 months compared with other big-ticket items.

“This is favorable to banks and RSB, in particular. Our partner developers have expressed optimism in the growth of the housing industry, particularly on horizontal developments. We also see a continuing demand for housing from the OFW sector,” Latinazo added.