THE top officials of the country’s banks see a stable outlook for the banking system, a survey conducted by the Bangko Sentral ng Pilipinas showed.
The maiden report on the Banking Sector Outlook Survey (BSOS) for the first half of 2018 found 66.7 percent of respondents considering a stable outlook for the industry while 33.3 percent believe the banking system will be stronger in the next two years.
“Bullish outlook implies that banks will continue to support the sustained development of the national economy. This resonates with the BSP’s overarching policy objective to promote a stable and sound banking system that is globally competitive, dynamic and responsive to the demands of a developing economy,” the BSP said.
The stable outlook is attributed to the country’s strong macroeconomic fundamentals, adequate liquidity, rising capital buffers and profitability of the banks.
Majority or 73.6 percent of respondents project the economy to grow between five and seven percent in the next two years.
The government forecast for 2018 to 2020 is at seven to eight percent. The World Bank projects a growth of 6.7 percent in 2019 and 6.2 percent in 2020, while the International Monetary Fund sees the Philippines growing at 6.7 percent in 2018 and 2019.
Majority of the respondents believe that expanding client base, deepening of customer relationships and developing new products are necessary to grow the bank.
With the rapid pace of digital technology reshaping the banking industry, respondents underscored the need to optimize available technology.
The banking industry supports the use of technology-enabled solutions as survey results reveal that 81 out of 114 or 71.1 percent of respondent banks have plans to use technology in the banking transactions in the next two years. Managing reputational and operational risks, data and cyber security enhancement, upholding consumer protection, and increase of capital and liquidity ratios are also deemed important to protect the bank.
Consumer loans, manufacturing and agriculture are the sectors of primary focus in terms of lending.
“Overall, the maiden conduct of BSOS discloses the banks’ awareness of internal and external risks affecting their business. The BSOS similarly shows that banks are formulating strategies to address these concerns while positioning for opportunities particularly from financial technology (fintech),” the BSP said.
The BSOS was the first report published yesterday. It gathers the sentiments of presidents, chief executive officers and country managers of 114 banks related to their growth outlook and risk assessments, business performance strategies and insights on regulation and supervision.
The full report can be downloaded on the BSP website. (MEA)