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April 12, 2024

BPI expects strong loan growth on rate cut hopes

Bank of the Philippine Islands (BPI) anticipates a robust expansion in its lending activities this year, buoyed by a flourishing economy and the prospect of interest rate reductions by the Bangko Sentral ng Pilipinas (BSP).

BPI chief finance officer and chief sustainability officer Eric Roberto M. Luchangco conveyed optimism about the forthcoming fiscal year, citing enhanced customer confidence and positive forecasts for gross domestic product (GDP) growth.

He noted a general sentiment among customers that 2024 would bring improved economic conditions, aligning with the bank’s expectations.

Luchangco cited a prevailing upbeat outlook shared by both consumers and corporations, indicating a potential resurgence in market participation, which would consequently stimulate BPI’s growth trajectory.

As of the end of 2023, BPI’s loan portfolio reached P1.9 trillion, marking a notable 10.5% increase year-on-year. The growth momentum is anticipated to continue, fueled by factors such as the government’s target GDP growth of 6.5% to 7.5% for the year, exceeding the previous year’s expansion rate of 5.6%.

Luchangco said the envisaged rate cuts by the US Federal Reserve, potentially mirrored by the BSP, would further bolster loan demand. Although the timing of these cuts is contingent on data trends, Luchangco suggested a probable implementation in the second half of the year, likely spurring lending activities.

BSP Governor Eli M. Remolona, Jr. previously indicated a cautious approach, citing inflationary risks, suggesting that the Monetary Board might delay initiating its easing cycle in the first half of the year. Conversely, the Federal Reserve, having raised its target rate by 525 basis points since March 2022, is expected to transition towards a more accommodative policy stance later in the year.

Meanwhile, BPI announced its ambition to disburse P19 billion to P20 billion in sustainable retail loans over three years, following the launch of its green retail loan product.

BPI head of retail lending and bancassurance group Dexter Lloyd C. Cuajator disclosed plans to allocate P5 billion in loans this year under the newly introduced Green Solutions product, which aims to finance eco-build initiatives, solar panel mortgages, and electric vehicles.