MANILA, Philippines — Sy-led BDO Unibank Inc. sees its earnings momentum holding steady for the rest of the year on the back of balanced loan growth, stable asset quality and robust fee-based income, even as it monitors possible second-round effects from the new United States tariff regime.
BDO president and CEO Nestor Tan said the country’s largest lender is poised to sustain the performance in the first half, when profits grew by three percent as lending expanded by low double digits across consumer, middle market and corporate segments.
“We expect a continuation of the first half. The first half was strong with good balanced growth on the lending side, low teens across the board and mid-teens growth in fee income supported by client acquisition,” Tan said in an interview with Channel NewsAsia.
“Asset quality remains stable,” he added.
He noted that investment activity, particularly in productive capacity, is also starting to pick up, signaling more lending opportunities.
Infrastructure spending and a recovery in real estate can also drive medium-term growth, citing an estimated 10 million housing backlog outside Metro Manila by 2028.
Earnings of the listed bank grew by three percent to P40.6 billion in the first half from P39.4 billion in the same period a year ago, driven by the continued strength of its core businesses.
Last month, the lender raised a record P115 billion from its latest peso-denominated ASEAN Sustainability Bond offering, marking a record-breaking fundraising that was 23 times oversubscribed from the initial offer size of just P5 billion.
While US tariffs are expected to cause a global slowdown, Tan stressed that the direct hit to the Philippines would be minimal, as exports account for only 16 percent of gross domestic product (GDP), with just two percent of that going to the US.
“That’s just a few basis points of GDP. We don’t see a major effect on the banking industry,” Tan said. “But what we’re worried about is the second order impact, meaning we have exporters to other countries that will be impacted by the tariffs.”
According to Tan, the US tariffs may cause a slowdown in other economies because people will buy less as a result from higher prices. There will also be possible changes in business process outsourcing (BPO) demand and overseas employment if partner economies slow down.
“But in the Philippines, we tend to have a counter-cyclical effect. When the whole world is slowing down, we tend to get better deals from our trading partners. So you might see a redirection of the trade flows,” Tan said.
Loan demand in the domestic market also remains healthy, he said, with consumption still buoyed by “revenge spending” and middle-market firms starting to invest in working capital and capital expenditures.