THE worst is probably over for the local banking system, as lending activities are indicating signs of recovery in recent months, Bank of the Philippine Islands (BPI) president Jose Teodoro Limcaoco said.
In a virtual presser on the 170th anniversary of the bank, Limcaoco said the bank saw increased activity in several sectors of the economy which has translated to higher banking availments in recent months.
“Is the worst over? I think it is. I think our borrowers have adjusted. We are looking at manageable NPL (non-performing loans) levels going into the end of the year and into next year,” Limcaoco said.
The BPI President said their recent numbers showed that mobility and economic activity was picking up.
“We saw mortgages growing, car loans were growing. We are beginning to see interest in both our credit card transactions and even SME (small and medium enterprises) are starting to pick up,” Limcaoco said.
Corporate loans, however, were still weak. Limcaoco traced this to the fact that they have raised a lot of capital during the pandemic year.
Just last week, the Bangko Sentral ng Pilipinas (BSP) reported that the bank lending contraction slowed for the second consecutive month in June.
Central Bank data showed that outstanding loans of universal and commercial banks decreased by 2 percent in June this year from its level in the same month last year. While still in contraction mode, this is slower than the 4 percent decrease seen in May this year.
Limcaoco, however, said that the industry should still be wary of the delta variant’s entry into the Philippines, which forced renewed lockdowns across the country.
“This ECQ [enhanced community quarantine] that we will go into starting on the sixth is a set back. But God-willing, hopefully the setback isn’t too great. Then we can bounce back quickly,” the bank president said.
“I think we can, as we get the vaccination program up to speed and the people to cooperate on the lockdowns,” he added.