betking Official website
sbet JP Morgan upbeat on PH growth story
Oliver Brinkmann—CONTRIBUTED PHOTO
Global banking powerhouse JP Morgan Chase is “quite bullish” on Philippine growth prospects in the coming year, especially with domestic loan growth projected to be four times faster than that of the economy.
Oliver Brinkmann, JP Morgan co-head of corporate banking for Asia-Pacific, told the Inquirer last week that their optimism stemmed from expectations that the Philippines was poised to be the second fastest-growing economy in Southeast Asia this year and in 2025.
Article continues after this advertisement“That translates into real economic growth at the end of the day, and it also translates into loan growth,” Brinkmann said in an interview.
FEATURED STORIES BUSINESS BIZ BUZZ: DongYan returns crown to KathDen BUSINESS Fuel price hike set on Tuesday, Nov. 26 BUSINESS Vista Land scores multiple wins at Lamudi The Outlook 2024: Philippine Real Estate AwardsBased on the latest outlook of the Asean+3 Macroeconomic Research Office, the Philippines will be just behind Vietnam, which is projected to grow by 6.2 percent and 6.6 percent in 2024 and 2025, respectively.
JP Morgan, which has been operating its banking franchise in the Philippines since 1961, provides, among others, corporate banking services to local companies that are making cross-border transactions and keen on global expansion.
Article continues after this advertisementBrinkmann, who was briefly in Manila to meet with clients, said certain sectors in the country—renewable energy, infrastructure, tourism and telecommunications—were now opening up to foreign investments given the optimistic prospects for loan and macroeconomic growth.
Article continues after this advertisementCiting data from S&P Global, he pointed out that loan growth in the Philippines was projected to reach anywhere between 12 percent and 24 percent until the end of next year, especially if it was supported by a stable macroeconomic environment and “consistent government policies.”
Article continues after this advertisementThis is two to four times faster than the country’s average gross domestic product growth of 5.8 percent in the first nine months of the year, and the projected 6.5-percent expansion in the last quarter of 2024.
It is also faster than the 9.7-percent average loan growth of the country’s big banks in the January to September period, excluding their lending to each other, based on data from the Bangko Sentral ng Pilipinas (BSP).
Article continues after this advertisementTo meet the anticipated surge in demand, JP Morgan plans to increase the headcount of its corporate banking unit in the Philippines by 20 percent between now and next year, and 10 percent in the Asia-Pacific.
JP Morgan’s corporate center in the Philippines currently has more than 20,000 employees who provide business operations support for the American bank.
“It’s a real growth story. We keep investing into the market, we’re deeply rooted and we think we can capture the major opportunities as they come,” Brinkmann said.
This comes as a dovish BSP raised the possibility of cutting interest rates by a total of 100 basis points next year. So far, the central bank has slashed rates by a total of 50 bps this year to 6 percent.
Subscribe to our daily newsletter
Easing monetary policy is typically good for loanssbet, consumer spending and investments due to lower borrowing costs. At the same time, economic growth also translates to loan expansion as consumer confidence rises, making them more willing to take risks and borrow. INQ
READ NEXT BIZ BUZZ: DongYan returns crown to KathDen Severe weather conditions could hurt Q4 economic growth EDITORS' PICK Tolentino lauds MASTS for fostering meaningful connections in sports, cultural events Sagibu: Landless farmers get taste of owning land Marcos names caretakers for UAE trip; VP Duterte sidelined Security officer picked by VP Duterte disbursed confidential funds Why Dolly de Leon failed to secure that first Oscar nomination Four OVP execs cited for contempt show up at House hearing MOST READ West PH Sea: US drawing up contingency plans for Taiwan emergency – Kyodo VP Sara fires back, tags Marcoses in Ninoy assassination Security officer picked by VP Duterte disbursed confidential funds OVP exec: I left secret funds to security head as per VP Sara's order Follow @FMangosingINQ on Twitter --> View comments