|
By Maricel E. Burgonio, Reporter
PHILIPPINE banks expect lending growth to remain robust this year
despite their exposure to the collapsed Lehman Brothers Holdings
Inc.
Citing high demand from the corporate sector,
Metropolitan Bank and Trust Co. said it is bullish about its lending
business, with growth in that segment at 20 percent at end-August.
“We’ve been getting demand from the power
sector and other infrastructure projects,” Vicente Cuna, Metrobank
executive vice president, said.
The Philippines’ biggest bank has a
P2.4-billion loan exposure to Lehman Brothers’ local units, which
are active in buying lenders’ non-performing assets. Besides Metrobank,
the two Lehman units, Philippine Investment One Inc. and Philippine
Investment Two Inc. also bought soured assets of Development Bank of
the Philippines and United Coconut Planters Bank.
Metrobank’s thrift unit, Philippine Savings
Bank (PSBank), also expects no slowdown in its lending.
“Local lending is still peso-based.
Furthermore, the exposure to Lehman is small. What [is more crucial
is] if the economy will slowdown because there will be less
borrowing by corporates and individuals,” Pascual Garcia, PSBank
president, said.
Capital ratio remains high
Antonio Moncupa, East West Bank president, said
banks’ capital adequacy ratio remains high even as local
lenders’ exposure to Lehman is small in relation to the
industry’s total assets.
“This means there is much room to book more
risk[y] assets, including loans. The industry also has the lowest
intermediation cost or loans to deposits ratio in the world, which
means there is really much room for loans. All these should
counteract the general trend toward risk aversion and the possible
slowdown in hot money inflows,” he said.
The executive said banks also had been moving
towards traditional loans and deposits given smaller trading
profits.
At-end June, or months before the Lehman
collapse, Philippine bank lending surged 24.2 percent year-on-year
to P2.105 trillion, driven by borrowings from the wholesale and
retail trade; electricity and gas; transport and communication; and
consumer sectors.
Fitch says outlook dim
In a statement issued Monday, Fitch Ratings Inc.
said Asian banks face growing challenges arising from external
shocks and the slowdown in both their domestic economies and in
global growth despite their healthy performance in the first half of
the year.
Fitch said the ties to Lehman would result in
some additional credit costs despite the minimal exposure.
“The extent of this slowdown is not yet clear
as it depends on how the credit crisis plays out and how seriously
troubles in the financial sector impact the real economy,” the
credit rating company said.
Fitch said banks in Asia remain generally good
in terms of levels of profitability, asset quality, and
capitalization.
“It was the agency’s expectation that
negative trends would be more apparent in the second half of 2008
and the recent turmoil in global financial markets, stemming from
the ongoing credit crisis centered on the US, is likely to
exacerbate these. So far in 2008 in Asia we have seen some adverse
developments,” it said.
Capital market reforms to continue
Francis Lim, Philippine Stock Exchange (PSE)
president, said there is no letup in capital market reforms.
“[I] have not received any proposals or
whatsoever with respect to the deferment of any of the reforms which
are already in place, and [those] that [have] yet to be signed into
law,” he said, referring to the Personal Equity Retirement Act (PERA)
and the Credit Information System Act (CISA). President Arroyo
already signed into law the PERA, but has yet to approve the CISA.
Lim said the PSE would still push for the
passage of a law granting tax perks to real estate investment trusts
(REITs), which would allow more investments in the property sector.
NGO says remittances unlikely to help
In a separate briefing, the Freedom from Debt
Coalition said remittances from overseas Filipino workers (OFWs) are
unlikely to help the Philippines weather the economic difficulties
of its biggest export market, the US.
Walden Bello, the president of the
non-government organization (NGO), said the US downturn will
translate into an Asian recession.
“China’s main foreign market is the US and
China, in turn, imports raw materials and intermediate goods that it
uses for exports to the US from Japan, Korea and Southeast Asia,”
Bello said, referring to the trading relations linking these
countries.
Besides being the Philippines’ largest export
market, the US is also the biggest source of OFW money sent home.
Maitet Pascual, also a trustee of the NGO, said
OFW remittances have been a lifeline of the domestic economy. She
however said that money sent home by workers in oil-producing
countries may prop up remittances given the record price of the
commodity in recent months.
The Bangko Sentral ng Pilipinas (BSP) earlier
said OFW remittances would end this year above its forecast, citing
high demand for skilled Filipinos abroad.
The BSP projects remittances to grow by 10
percent this year from $14.49 billion last year.
Based on its latest report, money sent home
through banks grew 17.2 percent to $8.2 billion.
-- With Katrina Mennen A. Valdez and Ira Karen Apanay
|
