EastWest Bank is forecasting robust loan growth of 10% to 15% this year, a testament to the enduring strength of consumer spending within the nation.
Despite growing concerns surrounding recent domestic corruption issues and their potential impact on business confidence, the bank’s CEO, Jerry G. Ngo, remains optimistic. He believes consistent growth is vital for a successful consumer-focused bank.
As of June, the bank’s total loans and receivables reached P351.41 billion, already showing a 4.46% increase from the end of 2024. This growth is largely fueled by a significant surge in consumer loans.
Consumer loans now comprise a substantial 84% of the bank’s overall portfolio, reaching P298 billion in the first half of the year – a remarkable 15% year-over-year increase. This demonstrates a clear preference for lending to individuals rather than businesses.
While acknowledging the potential for broader economic repercussions from the corruption scandal, Ngo emphasized the bank’s limited direct exposure due to its focus on consumer lending. However, he admitted the issue is a significant deterrent for potential foreign investment.
The current climate presents a challenge, as foreign investors consistently raise concerns about the scandal before even beginning discussions. This hesitancy could impact the overall economic landscape.
Looking ahead, EastWest Bank also intends to strategically expand its lending services to the small and medium enterprise (SME) sector, recognizing the vital role these businesses play in economic expansion.
Ngo highlighted the nation’s young demographic – a median age of 26 – as a key driver of future consumption. He believes fostering entrepreneurship and supporting SMEs is crucial for sustained economic growth.
The recent launch of the BizAccess Visa Debit card is a direct response to this strategy, specifically designed to cater to the financial needs of SMEs. This initiative aims to empower small business owners and stimulate economic activity.
Lowering interest rates, driven by the central bank’s easing cycle, is also expected to contribute to loan growth by further encouraging consumer spending. The bank is carefully monitoring the foreign exchange rate in relation to these rate cuts.
Despite the peso recently hitting a record low against the dollar, Ngo anticipates potential currency appreciation as the US also begins to lower interest rates, potentially attracting increased capital inflows.
EastWest Bank’s financial performance reflects this positive outlook, with a net earnings increase to P2.3 billion in the second quarter, bringing the first-semester profit to P4.13 billion – a significant rise from the previous year’s P3.49 billion.
