Thursday, 15 October 2009

Philippine banks upbeat on Q3 performance

Doris C. Dumlao
Philippine Daily Inquirer

MANILA, Philippines--Business and macroeconomic conditions are seen improving in the third quarter despite the damage caused by Tropical Storm “Ondoy” and Typhoon “Pepeng.”

“The third quarter is better than the second and the second was better than the first,” Citibank Philippines country chief executive officer Sanjiv Vohra told reporters at the sidelines of an economic briefing by macroeconomic managers on Wednesday.

“Whatever is lost in production, we will probably make up for in consumption,” Vohra said. “Also, there had been no job loss,” he added.

Citing an initial reading of the situation, he said the recent natural calamities that hit the country were not seen to make a big impact on the economy or on the banking system despite some “technical” delinquency.

In the case of Citibank, it has granted a 30-day debt relief for credit card and personal loan customers residing in areas hardest hit by “Ondoy,” including Metro Manila, Rizal Province, Bulacan and Pampanga.

“We’re committing to extend the same to people hit in (north) Luzon, but we’re still assessing the timing,” Vohra said when asked whether Citibank would agree to a longer reprieve.

“It’s the right thing to do because it will also allow people access to credit as they rebuild their houses,” Vohra said.

Raffy Algarra, treasurer at Security Bank Corp., said the market consensus was that the recent calamities would chip off maybe only 0.5 percent of gross domestic product.

The damage to property arising from these unfortunate events, Algarra said, would likely be offset by additional spending spurred by overseas Filipino remittances and international grants.

He noted that the peso’s recent appreciation was partially due to the front-loading of remittances when a number of banks and cash transfer agencies waived remittance fees as part of post-Ondoy relief efforts.

Algarra said he was sticking to the outlook that the peso could hold up at 46 to the US dollar by the end of the year, at the very least.

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