First Standard on track to meet growth target
BACOLOD CITY — Financing company First Standard Finance Corp. is on track to meet its growth target of 20-30% this year, its top official said.
“For 2023, we started quite strong rather than what was expected. So far, for the first six months, we are on track. I’m hoping that the remaining months will be the same or even better,” First Standard President Jacqueline Tan-Sainz told reporters here late on Monday.
“(With) businesses coming back in the Philippines, there are lots of entrepreneurs that are starting, so that’s where our target market is. With that, we were able to offset the inflation on expenses. I can say that 2023 is stronger (and) better than last year,” she added.
Data from the company showed its revenues rose to P503.56 million in 2021 from P418.06 million in 2018. Its compounded annual growth rate (CAGR) also stood at 6.4%.
Ms. Tan-Sainz said the company’s lending performance has also been improving amid the reopening of the economy.
“With the loosening of borders, there are a lot of entrepreneurs who are willing to take risks again. During the pandemic, people were afraid of risk. They want to be safe; they want to survive. This year, people are really starting to go out and start new businesses again. That’s where we come in to cater to them,” she added.
“Last year, a lot of things happened to financial institutions, like the rise of interest rates and inflation expenses, but we were able to still do good. It’s really more of an additional volume of our loans, because with the opening of our borders and loosening of restrictions, the business is really coming back to the Philippines,” she added.
First Standard is also working on expanding its locations outside of the Visayas, the official said.
“We are concentrating on our expansion. In Visayas, we are very strong. We have kind of saturated Iloilo, Bacolod, and Cebu. So currently we are concentrating on adding more offices in Luzon and west of Mindanao,” Ms. Tan-Sainz added.
The firm is currently present in over 80 locations nationwide. It is targeting to reach 100 locations, which Ms. Tan-Sainz said is a “moving target.”
“We are hoping to reach (100 locations). We had a timeline during the pandemic — now we need to set a target date again,” she said.
“During the pandemic, we had to stop (our expansion plans) because we wanted to survive. Now, we are continuing. Not only that, we added multiple products to adjust and cater to the needs of clients. That’s one of our biggest factors in the increase of volume,” she added.
However, Ms. Tan-Sainz said elevated inflation and high interest rates pose risks to their operations.
“As you know, interest is part of our capital, our cost, so it affects everything. It’s one thing we are trying to monitor. Hopefully, it will stabilize and lower by the end of the year. With that, we will be able to improve,” she said.
The Bangko Sentral ng Pilipinas (BSP) raised borrowing costs by 425 basis points (bps) from May 2022 to March 2023, bringing the benchmark rate to a near 16-year high of 6.25% before pausing for two straight meetings.
The reopening of the economy has also resulted in increased competition, Ms. Tan-Sainz said.
“One thing also, (with) the reopening, that means more competitors for us. Before, during the pandemic, there were only a few game players, a lot of financing institutions. Yes, we are not very aggressive, but we were semi-aggressive, that’s how we got our clients. Now that everyone is back on track, of course, more competition so we have to be on top of our game,” she said.
“At First Standard, we try our best to cater to the needs of our clients. We customize business solutions for them, since our goal is to uplift Filipino lives. We are only able to do that if we adjust based on their needs. I think that’s where our main competitive advantage is,” she added. — Luisa Maria Jacinta C. Jocson