BPI Family sees strong loan growth despite higher prices due to TRAIN

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By Karl Angelo N. Vidal

The thrift lending arm of listed Bank of the Philippine Islands (BPI) is bullish on its loan growth despite the effects of the tax reform law.

In a round-table discussion on Tuesday, Joaquin Mari B. Abola, retail lending group head at BPI Family Savings Bank, Inc., said the lender is look at “high double-digit” loan growth this year.

Mr. Abola added that fast turnaround time, as well as competitive rates, will drive the growth of their loan portfolio.

“Fast turnaround time is always a big driver. Rates [are] another consideration,” he said, noting that obtaining the loan faster is more important for customers.

“We’re quite surprised because some of our competitors actually charge higher rates but their turnaround time is fast so they were able to get away with it. When you look at it, a one-to-two percentage point difference in rates, that will not impact a lot on the monthly amortization. The more relevant point for the buyer is getting to their dream fast.”

On the other hand, BPI Family Savings Bank said the tax reform law will have a positive impact for the lender despite the higher prices of oil and some cars.

“I think it’s going to be very positive,” Mr. Abola said. “We’re very encouraged because what is really happening is that there’s much more money in the pockets of the average employees.”

The Tax Reform for Acceleration and Inclusion Law (TRAIN), enacted as Republic Act No. 10963, provided tax cuts and exemptions on personal income and imposed an additional excise tax on petroleum, which came at a time of three-year highs for world crude prices.

The new law also introduced additional taxes on cars, coal, sugar-sweetened drinks and a host of other items, which has caused the prices of other widely used goods and services to increase in past months.

Nicholas Antonio T. Mapa, economist at BPI, said consumers can still afford to buy cars since the higher take-home pay compensates for the price increase.

“The additional purchasing power freed up by the TRAIN law should give potential car buyers the ability to purchase vehicles despite the increase in prices, fuel and overall inflation,” Mr. Mapa was quoted as saying in a statement.

Meanwhile, BPI Family Savings Bank’s retail lending group head also noted that they are looking at offering loans for luxury motorcycles.

“We want to go into big bikes. We still have to study that, but that’s a very small market.”