BDO Unibank Inc. (BDO) sees a positive outlook on large-scale infrastructure projects in the Philippines on sustained economic growth, but warned of uncertainties hounding the banking industry.
BDO President and CEO Nestor V. Tan said that, despite the positive outlook on the economy, the banking industry is faced with uncertainties on interest rates that are prompting the bank to be watchful on portfolio investments.
“We see sustained loan, and current- and savings-account growth, but pressure on yields continues. Also, there’s [an] uncertain interest-rate outlook this year,” he said at a recent news conference.
BDO is well-placed to take advantage of market opportunities, and is taking an active part in the country’s economic expansion.
“BDO has big exposures in project finance, with a combination of different types of industries from energy to toll roads and airports. We’re also a major player in mortgage lending,” Tan said, adding that, among Philippine industries, growth is driven by real-estate and infrastructure industries.
He cited the risks, which include diverging global monetary policies among central banks, geopolitical tensions in the Middle East, weak job creation and additional banking regulations.
On a positive note, Tan said the Philippines enjoys subdued inflation on low oil prices; an expected increase in public spending and election expenditures this year; and continued overseas Filipino workers’ (OFWs) remittance and revenue from the business-process outsourcing (BPO) industry.
BDO Executive Vice President and Treasurer Pedro M. Florescio III said the bank took advantage of its view of a strong dollar scenario, allowing the bank to generate trading profits.
BDO expects the US dollar to continue outperforming other currencies this year, thus, its trading and portfolio activities will be aligned with this outlook.
“We expect the US Federal Reserve to hike the interest rates in the second half of 2015,” Florescio said.
“We will also take a cue from the stronger Philippine economy, anchored on OFW remittances and BPO revenue. Election spending, government infrastructure spending and lower commodity prices will support this scenario,” he added.
BDO said the Philippines remains one of the region’s top performers in 2015, with growth driven by a resilient consumer sector, rising investment flows and revived government spending.
The country offers a lot of potential, and is an attractive growth market, given its expanding domestic base, young population and rising per-capita incomes.
1 comment
These people usually keep the information among themselves until they make a ton of money out of it. If they are announcing it, maybe they are already on the exit.