MANILA, Philippines?Banco de Oro, the country?s largest bank, expects lending to slowdown in 2009 as companies defer major capital expenditures due to the global financial crisis.

BPO president Nestor Tan said he believed the crisis would be hardest on the export and industrials sectors and these would show the most slowdown in loan demand.

?We still expect borrowers across the board, but you might see some deferment in major capital expenditures and that will have an effect on slowing down on loan activity,? Tan said.

The global squeeze will not cause Philippine companies to close shop, he said, but more corporate defaults are a big possibility.

?We just don?t know the extent. That is why we are continuously reviewing our portfolio and doing stress tests. We are looking at vulnerable industries and looking at our exposures,? he said.

The bank is also prepared to do refinancing and loan restructuring for clients.

BDO still has around 40 to 50 ?undeployed? branch licenses, but Tan said these might not all open in 2009.

Consumer and housing loans have already shown a marked deceleration this year, but Tan said he would still look closely at the first and second quarters next year to see if these two are hit by the crisis.

?One month may not tell the story? You have to look at the trend over time. We are only two months after the meltdown. We will probably look at it in the first and second quarter next year. When the crisis hit, the natural inclination is for everybody to fall back and that has created a substantial decline. But that doesn?t mean everybody is stopping. That only means they are assessing situation,? Tan said.

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