The Bank of the Philippine Islands (BPI) is adopting a more defensive lending stance as rising oil prices, fueled by tensions in the Middle East, threaten to pressure household budgets and business margins.
At the bank’s media briefing following its 2026 annual stockholders’ meeting, BPI president and CEO Jose Teodoro “TG” Limcaoco said the lender is preparing for potential economic headwinds. “These are times where people have to be cautious given the situation in the Middle East and the effects that might have on our economy,” Limcaoco noted.
He warned that sustained increases in fuel costs could ripple across the economy, raising transportation and food prices.
“Continued high prices will obviously cut into the ability of consumers to spend… there’s a knock-on effect on food and other basic necessities,” he said.
Limcaoco explained that BPI will tighten credit standards and strengthen collection efforts to safeguard its loan portfolio. “If we believe that, then we have to be a little more cautious by maybe tightening credit standards or by upping our collection efforts,” he said.
Ginbee Go, head of consumer banking, emphasized that underwriting standards are being recalibrated to reflect weaker borrower capacity. “We are cautiously optimistic given the uncertainty… but we are being very defensive on our loan underwriting and evaluation,” she said, adding that income requirements and repayment capacity are being reassessed.
The bank is also becoming more selective in granting new consumer loans, particularly credit cards and personal loans, while monitoring early warning signs of borrower stress. For existing clients, BPI is rolling out restructuring and payment programs to help manage rising costs.
Chief Finance Officer Eric Luchangco acknowledged that asset quality may soften but ruled out a sharp deterioration. “I don’t think we’re expecting a surprise in NPLs… but we do expect that NPLs will rise,” he said.
Limcaoco added that while expanding in the consumer segment carries higher risk, it also offers stronger margins. “That risk is manageable,” he said, stressing that lending is focused on customers who can use credit to improve their financial standing.
Despite the cautious tone, BPI has not revised its full-year targets, citing uncertainty over geopolitical developments. “It’s hard to figure out exactly how long this situation is going to last,” Luchangco said. He added, “It may be a little bit premature to already say we’re adjusting targets… it would be better to have a little more clarity.”
