BPI ramps up IT spending, focuses on cybersecurity

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) continues to ramp up spending for information technology, focusing a huge chunk of the budget for cybersecurity.

BPI president and chief executive officer Cezar Consing said the listed bank would continue to allot between six and seven percent of its total revenues for IT spending.

“About six to seven percent of revenues is spent on IT and cybersecurity is a main component of that. It is quite high and as our revenues go up, it is consistently going up,” Consing added.

Revenues of the country’s fourth largest bank in terms of assets climbed 6.7 percent to P71.02 billion last year from P66.55 billion in 2016. This means the bank spent between P4.3 billion and P5 billion for IT and cybersecurity last year.

“That is the ratio a lot of Asian banks have, so we are in good position in cybersecurity. I think certainly in the local industry we are probably one of the leaders in 2017,” he said.

BPI is expecting to sustain a double-digit lending growth next year as it remains bullish on the county’s economic expansion despite higher interest rates.

“We are still trying to figure that out. I’d say it will obviously be in the teens especially if the economy continues to grow the way it has been growing. It may not be the same pace in the last four or five years, but it will still be healthy growth,” Consing said.

The loan portfolio of the 167-year old bank grew 12.9 percent to P1.27 trillion from January to September this year.

“I actually think 2019 could be a better year for the economy because if you look at 2018 we were faced with high oil prices and high food prices and so that raised inflation. The central bank responded to that by raising rates,” he added.

Economic managers lowered this year’s gross domestic product (GDP) growth target range to 6.5 to 6.9 percent instead of seven to eight percent after it averaged 6.3 percent in the first three quarters of the year.

“Ultimately what is good for the economy is good for banks. A strong economy is obviously good for banks,” Consing said.

The bank president said the BSP now expects inflation to come down due to lower oil prices and stable food prices.

“When you think that the combination of oil prices having come down and with the interventions done by the government on the food side, the inflationary pressures are probably less, so inflation should begin to probably taper off.

And if inflation begins to taper off, the pressure to raise interest rates will subside a little bit and I think that might be better for the economy as a whole,” he said.