THE Bangko Sentral ng Pilipinas has published the report on the Banking Sector Outlook Survey (BSOS) for the second semester of 2018.
Survey results show that banks maintain their optimism on the country’s economic prospects, as 86.1 percent of respondents expect the domestic economy to grow between six percent and seven percent within the next two years.
More importantly, the outlook on the Philippine banking system remains stable for 70.2 percent of all respondents, with the rest mostly expecting a stronger banking system.
Upbeat projections led more than 72 percent of respondents to expect double digit growth in assets and deposits, while 81.0 percent and 92.4 percent expect loans and profits to grow more than 10 percent, respectively. The upgrade of the S&P Global Ratings Banking Industry Country Risk Assessment of the Philippines also contributed to the optimism.
Universal and commercial banks are most eager to expand market coverage, with 75.8 percent and 84.4 percent of respondents projecting double digit growth in assets and loans, respectively.
Meanwhile, 76.9 percent of rural and cooperative banks, ahead of other bank types, aim to grow deposits by 10 percent or more. For their part, thrift banks are most optimistic on their profits as 97.0 percent of respondents anticipate double digit net income growth.
To realize the expected bank growth, the respondents set the following strategic priorities for their operations: to grow the bank, to optimize use of available technology, and to protect the bank.
Meanwhile, the use of technology is expected to reshape the future landscape of the banking system as 73.5 percent of banks have plans to use technology in their transactions in the near term.
The new section on organizational conduct and risk culture reveals that most banks are satisfied with their internal risk culture and underscores the importance of inputs from internal control functions in the business decisions of the board and senior management.
The banks deem institutional risk as the main threat towards achieving their targets. (PR)