OFWs stimulate growth of RP banks' consumer loan facility

The Filipino Overseas Workers (OFWs) continues to fuel the growth of the Philippine banking system's consumer loan facility, as this sector has become the facility's main taker in the last few years.

Banker Victor B. Valdepeñas said that consumer loans which includes housing loan, auto loans, among others, is expected to post encouraging growth in the next few years as the OFW market is taking advantage of the attractive packages offered by the Philippine banking system, in the consumer loan feature.

Valdepeñas, who is also the president and chief executive officer (COO) of universal bank Union Bank of the Philippines (UBP), said the bank's lending operation has recovered with an average of six percent growth last year, to a total portfolio of P1.6 trillion, from a plateau of P1.4 billion in the post 1997 regional economic crisis.

Among other developments, Valdepeñas said the inflow of funds from the OFWs remittances has kept the banking system alive in the country.

According to Valdepeñas, OFWs are now building or renovating houses and acquiring new cars, while others are entering into businesses, thereby strengthening the consumer lending growth.

He said the corporate loan facility is also improving, bankers are also expecting at least six percent increase in the corporate lending product.

Amid the economic instability and threat of economic recession in the country, Valdepeñas said deposits in the banking sector have continuously grown.

In fact last year, UnionBank posted an increase of 18 percent to P54 billion in its deposit base, while customer base doubled in one year.

"People continue to bank, especially on banks they have trusted and give them value for their money," Valdepeñas said in an interview recently.

In the last few months, amid the political squabble in the Philippines, he said the banking sector is enjoying a tremendous growth for deposit base.

In the last few months, Union Bank is enjoying roughly 25 percent increase of its deposit base.

Valdepeñas, together with the top honcho of Union Bank Justo A. Ortiz , and other executives were in Cebu recently to formally open its Cebu Business Class Lounge to give premier service to its high-end depositors.

With this more personalized service offered to upscale depositors, the bank is expecting to attract at least 10,000 more wealthy depositors in Cebu in the coming months.

Union Bank's first Business Class Lounge in Cebu is located at its newly opened outlet at the Cebu Business Park.