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October 01, 2022

Limcaoco projects 5% to 7% credit growth this year after slump

Bank of the Philippine Islands (BPI) led by Bankero TG Limcaoco sees loan growth accelerating to a range of five to seven percent this year after slumping at the height of the COVID-19 pandemic.

BPI executive vice president and consumer banking head Ginbee Go said higher consumer spending made possible again by increased mobility would continue to fuel faster lending growth and boost consumer spending.

“By our own estimates, we will see consumers gaining loan growth while corporate loans will continue to be muted. Nevertheless, we are looking at this same growth in our loan books,” Go said.

The projected loan growth path of the 170-year old bank is aligned with numbers forecast by the Bangko Sentral ng Pilipinas.

Go noted that the BSP has been an early mover in responding to the pandemic, by lowering the banks’ deposit reserve requirements and the policy rates.

“We have seen also BSP signal that they are very much aware that we are still in the recovery phase,” Go added.

The increase in bank lending, according to her, is supported by the commitment of the central bank to maintain its accommodative monetary policy stance by keeping interest rates at record lows at least for the first half of 2022.

“The central bank has expressed willingness to stay patient while making the necessary adjustment in policy rates if the growth trajectory shows enough traction and inflationary expectations are no longer within boundaries,” Go said.

However, she explained the subdued rate hikes should not affect the availability of credit.

Go also believes the non-performing loans (NPLs) of Philippine banks should plateau as the economy opens up, more jobs are created again, and business starts picking up.

The merger between BPI and BPI Family Savings Bank dubbed OneBPI took effect last January 1, resulted to a combined client base of 8.5 million and more than 800 branches nationwide.

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