Rizal Commercial Banking Corp. (RCBC) anticipates still higher net income in the remaining months of the year on the basis of consumer loans picking up as businesses and households progressively becoming liquid, as consequence of both election- and infrastructure-related spending.
Michael L. Ricafort, economics and industry division head at RCBC, said the bank is confidently looking at a 7-percent income growth in the second quarter, significantly lower than its first-quarter performance, when the lender reported having generated net income averaging more than 12 percent.
Ricafort said the Yuchengco-led lender aims to wrap the year with net income averaging 6.5 percent to 7 percent more than previous.
“We have set that since last year, taking into account the election spending, the pick-up on infrastructure. We are at least catching up on the backlog because in the previous years we have seen some [public sector] under spending. So they’re trying to make up for that, as well as infrastructure public-private partnership projects in the pipeline,” he said in a briefing for financial reporters.
Ricafort also expressed optimism as to how the government under President-elect Rodrigo R. Duterte will perform over the near term, noting that continuity of performance is of utmost importance among local and foreign investors.
It was noted Duterte has already nominated a number of seasoned professionals making up his official family when he takes over in a few days.
However, Ricafort cited so-called risk events in the trading sector as consequence of some of the global players reporting a slowdown, particularly in China, the world’s second-biggest economy.
The $285-billion Philippine economy may also begin to feel the full impact of years of public sector under spending should the government under Duterte fail to deliver on the plan to ramp up the disbursement of public funds as percent of local output or the GDP.
Heightened public-sector spending in the years forward could push higher the cost of borrowing for both households and businesses down the.
RCBC remains the 9th largest bank in the country in terms of assets.
The lender reported a 12.43-percent year-on-year increase in consolidated net income in the first quarter, with loans and investments as key drivers.