Philippine banks wary of long-term impact of COVID-19

MANILA, Philippines — Philippine banks are wary over the long-term impact of the coronavirus disease 2019 or COVID-19, but are confident the country’s banking sector will remain resilient amid the virus outbreak.

BDO Unibank Inc. said the long-term impact of the COVID-19 pandemic is uncertain, while the impact has been limited to date as loan and deposit growth remain normal.

“However, the longer-term impact is uncertain and will depend on the COVID-19’s duration, depth and scale. With its robust business franchise and solid balance sheet, BDO believes it will remain resilient in the face of this current challenge,” the country’s largest lender said.

BDO assured the public that it is business as usual in all its branches and offices amid the month-long community quarantine imposed in the National Capital Region (NCR) by Malacañang to prevent the further spread of COVID-19.

BDO said it would continue to service the requirements of its clients through its more than 1,400 branches and 4,400 ATMs nationwide and digital channels via internet and mobile platforms.

Security Bank Corp. Sanjiv Vohra said the bank is doing everything in its capacity to deliver uninterrupted banking services and at the same time protect its employees.

Security Bank said it is too early to evaluate the impact of the contagion to its operational and financial performance.

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) said it has identified potential affected businesses as well as consumers who might be affected by the crisis.

RCBC said in a disclosure to the Philippine Stock Exchange (PSE) the bank has existing policies in place allowing the grant of financial assistance by way of suspension of payments and adjustment in due dates to all affected clients.

“The bank is in the middle of a stress test exercise to assess current crisis impact to its whole portfolio. The bank shall continue to serve the requirements of all its customers amidst this crisis,” RCBC said.

Maria Theresa Marcial-Javier, chief finance officer of Ayala-led Bank of the Philippine Islands, said the oldest bank in Southeast Asia, like other banks, has put in motion its business continuity plan as well as a pandemic response plan and protocol for the entire organization.

“Because we are in an industry requiring rigorous enterprise risk management and continuous contingency planning and stress testing exercises, the biggest risk is on our continued ability to operate in all potential scenarios of the outbreak,” Javier said.

Asia United Bank of the Rebisco Group said a 20 percent reduction in its loan bookings and a doubling in non-performing loans are possible as borrowing costs could increase by 25 basis points this year.

Aboitiz-led Union Bank of the Philippines said it has long prepared for any incident that might potentially disrupt business operations with robust business continuity plans.

The Bankers Association of the Philippines (BAP) said it supports the initiatives and guidance provided by the national government in addressing the health crisis.

It said the organization is in constant close coordination with the BSP to ensure continuity of banking services and operations to serve the public.

“The banking community shall adhere to the guidance set forth by the Department of Health and relevant agencies to ensure the safety of our people while we remain committed to deliver banking services to the public,” the BAP said.

Suzanne Felix, executive director of the Chamber of Thrift Bank, said the industry is adhering to the BSP’s directive that all banks should adopt and implement appropriate response plans and mechanisms to ensure the health and safety of their employees and customers while delivering financial services to the general public.

“Our members remain vigilant by constantly monitoring and gathering relevant information about COVID-19, both locally and globally and continue to assess the impact of the virus outbreak on their response strategies,” Felix said.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno said banks in general are adequately capitalized and very stable.

“So we are confident that our banking system will be able to absorb some of this relief in the meantime,” Diokno said.