RCBC Savings optimistic on consumer loan growth
Published Mar 18, 2019 12:00 am
By James A. Loyola
RCBC Savings Bank is optimistic that consumer loans will continue to grow this year despite lower consumer spending in the fourth quarter of 2018 when inflation peaked.
The bank cited the last Consumer Expectations Survey of the Bangko Sentral ng Pilipinas which showed that, due to higher prices of goods, changes in spending priorities, and lack of funds, Filipinos held back in buying big ticket items such as housing, motor vehicle, and other durables.
According to BSP, while consumers in 2018 had a less sanguine outlook, there is still hint of buoyancy in 2019.
“Buying conditions for big ticket items is less favorable for the current quarter (fourth quarter 2018) while buying intentions is broadly steady in the next 12 months,” the study said.
The same optimism was echoed by RCBC Savings Bank President Rommel S. Latinazo highlighting economic growth and easing of interest rates as factors that can boost banks’ loan portfolios this year.
Latinazo said that while higher interest rates have weakened the consumer’s willingness to subscribe to financing vehicles and signing real estate deals, there is still demand for these goods as the economy continues to swell.
“The Philippine GDP is still forecast to grow over 6 percent in 2019 to be driven by continued OFW remittances and public spending. This economic growth will continue to support the consumer financing business,” he noted.
He explained that, “while the slowdown in the last quarter of 2018 was due to the rising interest rates, we expect easing of the interest rates which will drive buyers to acquire new motor vehicles.”
Latinazo also noted that rising employment level will help fuel the consumer financing businesses of banks.
“As the economy grows, we expect the middle-income sector expanding which is the target for consumer financing,” he said.
The BSP study also revealed that Filipinos have a stronger intention to buy real estate items in the next 12 months compared with other big-ticket items.
“This is favorable to banks and RSB, in particular. Our partner developers have expressed optimism in the growth of the housing industry, particularly on horizontal developments. We also see a continuing demand for housing from the OFW sector,” Latinazo said, resounding the BSP study findings.
The bank cited the last Consumer Expectations Survey of the Bangko Sentral ng Pilipinas which showed that, due to higher prices of goods, changes in spending priorities, and lack of funds, Filipinos held back in buying big ticket items such as housing, motor vehicle, and other durables.
According to BSP, while consumers in 2018 had a less sanguine outlook, there is still hint of buoyancy in 2019.
“Buying conditions for big ticket items is less favorable for the current quarter (fourth quarter 2018) while buying intentions is broadly steady in the next 12 months,” the study said.
The same optimism was echoed by RCBC Savings Bank President Rommel S. Latinazo highlighting economic growth and easing of interest rates as factors that can boost banks’ loan portfolios this year.
Latinazo said that while higher interest rates have weakened the consumer’s willingness to subscribe to financing vehicles and signing real estate deals, there is still demand for these goods as the economy continues to swell.
“The Philippine GDP is still forecast to grow over 6 percent in 2019 to be driven by continued OFW remittances and public spending. This economic growth will continue to support the consumer financing business,” he noted.
He explained that, “while the slowdown in the last quarter of 2018 was due to the rising interest rates, we expect easing of the interest rates which will drive buyers to acquire new motor vehicles.”
Latinazo also noted that rising employment level will help fuel the consumer financing businesses of banks.
“As the economy grows, we expect the middle-income sector expanding which is the target for consumer financing,” he said.
The BSP study also revealed that Filipinos have a stronger intention to buy real estate items in the next 12 months compared with other big-ticket items.
“This is favorable to banks and RSB, in particular. Our partner developers have expressed optimism in the growth of the housing industry, particularly on horizontal developments. We also see a continuing demand for housing from the OFW sector,” Latinazo said, resounding the BSP study findings.