BPI corporate loan portfolio nears P500 B

MANILA, Philippines - The Bank of the Philippine Islands (BPI) is optimistic that its corporate lending portfolio will expand by another 30 percent or over P500 billion in the next 18 to 24 months.

Expected to give major boost to its corporate loan portfolio are the major infrastructure projects under the Public-Private Partnership (PPP) program, the continued aggressive nature of the local conglomerates, and the steady flow of foreign investors in the country.

“It is very encouraging,” Alfonso L. Salcedo Jr., BPI executive vice president and corporate banking group head, said.

The universal bank of the Ayala Group handles in various degrees the accounts of the top 750 corporations of the country.

“That is already 25 percent or P104 billion of total P400 billion corporate portfolio of BPI,” Salcedo said.

He likewise confided that their Asian corporates and export zone division anticipates that an over 20-percent growth in their accounts, dominated by Japanese business.

“In fact, we are finalizing partnership arrangements with Mizuho Corporate Bank, Shizuoka Bank and the Bank of Tokyo Lease and Finance to facilitate the financial needs of the Japanese locators,” he said, adding that number of Japanese conglomerates are likewise in discussions with BPI.

The country’s strong macroeconomic fundamentals, the success of the Japanese firms in the Philippines and the quality of the Filipino labor force continues to entice Japanese business.

The country’s working population is young and growing, both per capita GDP (gross domestic product) and per capita income. Japanese investors are attracted to the Philippines as a growing market.

BPI and the Ayala Group has close to 40 years of partnership with Japanese firms and has a dedicated BPI Japan Desk serving this client segment since the 1980s.

The joint venture company BPI/MS Insurance Corp., which has been offering non-life insurance to clients for the past 11 years, is a result of the partnership between BPI and Mitsui Sumitomo Insurance, with BPI owning 51 percent of the firm.

Meanwhile, the BPI executive vice president is keeping his fingers crossed that more PPP projects will get of the ground.

It has been involved in lending through a consortium for the $46.6-million DaangHari project, a four-kilometer four-lane toll road, from the junction of Daang Reyna and DaangHari in Las Piñas/Bacoor, Cavite to SLEX through the Susana Heights Interchange in Muntinlupa, traversing the New Bilibid Prison (NBP) Reservation. The proposed link-road will use the Susana Heights Interchange as exit and entry from north and south of SLEX and will include the construction of a new bridge/widening of the existing bridge crossing SLEX as well as the expansion of the Susana Heights toll plaza.

BPI was also involved in the P16.4 billion, PPP School Infrastructure Project (Phase I), although its share was a mere P500 million of the entire loan package.

Salcedo said that all the PPP projects, especially the infrastructure-related ones, requires a huge amount, which means the capital needed will be share by several financial institutions.

“Other local and foreign banks must get a piece of the pie, it is too big for one bank to handle, and that is good for the country,” the BPI executive vice president added.