BANK of the Philippine Islands (BPI) expects its consumer loans to grow by 10% to 12% this year as it continues to expand its customer base and with its auto and home lending businesses staying strong.

“We’ve crossed the P100-billion mark in auto loans and crossed the P200-billion mark in housing loans. 10 to 12% would be growth in our total consumer loan portfolio,” BPI Head of Consumer Banking and Executive Vice-President Maria Cristina “Ginbee” L. Go said on the sidelines of an event last month.

BPI is targeting about 20 million customers for its consumer banking business this year, she said. “We’re already at about 15 million. We never thought it’s even possible to grow double our customer base three years ago, but we have.”

“We have more appetite for risk because we believe that our penetration of consumer lending is still very low,” Ms. Go said. “Our consumer loan growth has been extremely impressive, but of course we want to make sure that we’re also able to manage the risks.”

The bank’s nonperforming loan (NPL) ratios for the consumer segment remain “well managed,” the official said.

“We are way below industry. Housing loans were 200 bps (basis points) lower than industry [in 2024]. Auto loans were 80 bps lower than industry. We have room to grow, definitely.”

BPI’s overall NPL ratio stood at 2.13% in 2024, while its NPL coverage ratio was at 106.2%.

Ms. Go added that the bank has “a lot of room to grow” in terms of microfinance lending, teachers’ loans through its subsidiary Legazpi Savings Bank, which became part of BPI following its acquisition of Robinsons Bank Corp. (RBC) in 2024, as well as personal loans.

BPI expects customer acquisition via online channels to continue as it continues to streamline its application process, she said.

Currently, more than half or 55% of BPI’s new-to-bank clients are acquired through digital channels, while the remaining 45% is on-boarded through branches, Ms. Go added.

The bank is also working to digitize all its branches and is looking at adding 80 more reformatted or digitalized branches this year, she said.

“We have 858 branches now, which is the combination of BPI and RBC branches. We will continue on branch transformation and optimization because part of the branch transformation is to make sure that we have the optimal branch footprint and that we’re able to provide the customer experience in-branch in light of all the digital capabilities that we already have, and make sure that we have an omni-channel experience,” Ms. Go said. “The digital format leverages on our digital capabilities and improves the customer experience because we shouldn’t be just transacting centers — we are advisory centers.”

BPI is also consolidating its branch network, the official said.

“There are areas wherein we’re saturated, particularly in Metro Manila. So, we will continue to consolidate branches, particularly since Robinsons Bank branches are also in the same areas where we are… We will retain the ex-Robinsons Bank branches in Robinson’s malls, where, of course, they have strategic locations.”

BPI’s attributable net income rose by 20.04% to a record P62.05 billion last year from P51.69 billion in 2023. — Aaron Michael C. Sy

THE BANGKO SENTRAL ng Pilipinas (BSP) could resume its monetary easing cycle this month and cut benchmark rates by at least two times this year but at a modest pace due to global and domestic uncertainties that could stoke inflation, GlobalSource Partners said.

“We believe benign inflation readings and forecasts should allow the BSP to sustain its easing cycle at least twice this year and in baby steps. Modest easing is critical when uncertainties abound, particularly regarding the prospects for growth and financial stability,” GlobalSource Partners said in a March 31 report written by country analyst Diwa C. Guinigundo and economic analyst trainee Audrey Herrera-Lim.

“With a potentially weak external payments position and the adverse exchange rate pass through, monetary policy could in fact remain generally cautious until the markers of global and domestic uncertainties relent,” it said.

BSP Governor Eli M. Remolona, Jr. last week said there is a “good chance” that the Monetary Board will cut rates by 25 basis points (bps) at their April 10 meeting, Bloomberg reported.

Mr. Remolona said the BSP remains on an easing cycle and could reduce borrowing costs by as much as 75 bps this year depending on data.

The central bank has brought down benchmark interest rates by a total of 75 bps since it began its rate-cut cycle in August last year, with its policy rate currently at 5.75%.

The Monetary Board in February unexpectedly kept rates unchanged amid uncertainties stemming from the Trump administration’s policies.

“With this information, we are convinced the BSP will resume what has now become its “calibrated rate-cutting cycle” during the next monetary policy meeting on April 10,” GlobalSource Partners said.

It expects Philippine inflation to average 1.7% to 2.1% this year, based on its own models.

“Such prognosis allows the monetary authorities ample leeway to further ease monetary policy. However, some word of caution is imperative. The previous BSP risk-adjusted forecasts are inching closer to the 4% upper end of the 2-4% inflation target. With both February and March inflation trending lower, risk-adjusted inflation forecasts that would be announced after the Board meeting on April 10, all other things being equal, could be lower than their current levels of 3.5% and 3.7% for 2025 and 2026, respectively,” it said.

The latest round of cuts in banks’ reserve requirement ratios that took effect last week, which released over P300 billion in additional liquidity, could also be inflationary, it added.

“Already, the BSP has suggested that the output gap could already be in a slight positive territory such that a rate cut if not appropriate and timely could add more price pressure.”

GlobalSource Partners added that while slowing domestic growth due to weakening business activities and global uncertainties amid the United States’ tariff policies could support sustained monetary easing, financial stability issues may lead the Philippine central bank to err on the side of caution.

The BSP in its latest Financial Stability report warned of risks stemming from global trade pressures, geopolitical tensions and domestic debt concerns.

“The content of the latest stability report has actually different implications for monetary policy. On the one hand, it calls attention to global uncertainty, which would require constant monitoring of market risks as well as cautious monetary policy,” GlobalSource Partners said.

“On the other hand, the issue of excessive household borrowing, especially unsecured consumer loans, might force the authorities to sustain easing to avoid squeezing borrowers and prevent banking stress. While the capital markets are presented as an alternative funding source, Philippine capital markets are rather shallow and may not allow this soon. At this point, capital markets could hardly serve as “spare tire” should banks decide to pull back.”

The Philippines’ weak external payments position could also put pressure on the peso, which may stoke inflation, it added.

The BSP expects the country’s balance of payments (BoP) position to swing to a deficit this year, as well as post a wider current account deficit, amid global trade volatilities.

The central bank’s latest projection shows the overall BoP will register a deficit of $4 billion this year, equivalent to -0.8% of gross domestic product (GDP).

In 2024, the BoP position stood at a surplus of $609 million, plunging by 83.4% from the $3.672-billion surplus at end-2023.

Meanwhile, the current account deficit — which covers transactions involving goods, services, and income — is expected to reach $19.8 billion this year, equivalent to -3.9% of economic output.

Latest data from the BSP showed the current account deficit widened by 41.4% to $17.5 billion last year from $12.39 billion in 2023. This marked the second-largest current account deficit on record after the $18.3-billion gap recorded in 2022.

“This would imply that a weak peso could proceed from an external deficit… Thus, it also means that the inflows from foreign investments and foreign debt would not suffice to reverse the huge current account deficit of nearly $20 billion in 2025 and over $21 billion in 2026. Unless the BSP keeps its policy rate steady, or shifts to a more cautious stance, inflation is bound to gather some pace due to exchange rate pass through,” GlobalSource Partners said. — A.M.C. Sy