- Published on Monday, 03 December 2012 21:17
- Written by Jun Vallecera | Reporter
INVESTOR
are divided on the country’s credibility as investment and growth haven
but not on its capacity to continue to expand beyond this year that is
better than ever, according to the president of the Bank of the
Philippine Islands (BPI).
Aurelio R. Montinola
III, honored as “Man of the Year” for 2012 in ceremonies hosted by the
Management Association of the Philippines (MAP), said on Monday that the
7.1-percent growth posted in the third quarter has raised the
likelihood that the pace of continued expansion at the upper end of the
5-percent to 6-percent growth range is attained.
“I think we have a
very good chance to do 6-percent growth this year. And the big bet is we
can do another 6 percent next year,” he told reporters soon after
receiving the award at the Hotel InterContinental in Makati City.
Montinola said for the
Philippines to sustain growth and make it inclusive, it is necessary
that such growth average 5 percent to 6 percent every year for the next
five or six years at least.
There is an ongoing
debate among economists and local analysts that while local output,
measured as the gross domestic product, averaged a high of 7.1 percent
in the third quarter, such growth embraced only the upper and middle
sections of the economy, not the teeming masses of Filipinos hardly able
to open a bank account, for instance.
“I have always said we
should always strive to achieve growth of between 5 [and] 6 percent
every year if we can. Anything above 6 percent is really a bonus because
the economy is getting better,” Montinola said.
He added that he
believes the 7.1-percent third-quarter performance was sustainable
rather than a one-off event and that from a global perspective, the
Philippines has proved it can grow even in an environment “when there
are just too many places where economies are not doing that well.”
Montinola said there
are those who also believe the Philippines may be able to sustain the
reinvigorated pace of expansion while others remain skeptical, saying
“the credibility of the Philippines [as growth and investment haven] is
still mixed.”
But he expressed
optimism that growth is sustainable and drew from personal experience
involving the signing of a cooperation agreement between BPI, where he
is president and chief executive officer, and a delegation of Japanese
investors from Misuho Corp.
“It was just a
cooperation agreement and the signing was the easy part. The good part
is that the delegation will likely bring in three or four more Japanese
investors with each likely to invest at least $300 million each,”
Montinola said.
He added that little
events like this all add up to something substantial and this was why he
remains optimistic of continued growth down the line.
“We will continue to remain positive,” Montinola said.
He added that BPI lending growth was likely to average 15 percent higher this year than n 2011.
At this level, BPI loan growth is higher than industry loan growth of just a little above 13 percent.
For next year, Montinola forecasts loan growth averaging 12 percent to 14 percent.
BPI allocated a third
of its loan portfolio to top-tier corporate borrowers this year and has
extended the equivalent of 25 percent for the middle market and another
15 percent for small and medium scale entrepreneurs.
Twenty-five percent of BPI’s portfolio are reserved for the consumer segment of the loan market every year.
Montinola said that
bank margins, a key indicator of profitability that has been pinched
significantly by the low interest-rate environment, will hold where it
is at present and for the next 12 to 14 months.
Bank margins have averaged between three to four percent, most bank executives said in earlier interviews.
In Photo:
The Management Association of the Philippines (MAP) awards Aurelio R.
Montinola III (second from left), president and CEO of Bank of the
Philippine Islands (BPI), as Management Man of the Year. Others in photo
are (from left) Eduardo Francisco, MAP president; Dr. Jaime C. Laya,
chairman of MAP Management Man of the Year Judging Committee; and
architect Felino Palafox Jr., chairman of MAP Management Man of the Year
Search Committee. (Alysa Salen)
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