KUALA LUMPUR—Domestic consumption, which accounts for about two-thirds of gross domestic product (GDP), is expected to stay strong this year, providing support for economic growth despite challenges from overseas.
The top local official of Maybank, one of Southeast Asia’s largest banks, said the country’s strong macroeconomic fundamentals, together with the Aquino administration’s good governance agenda, would help the Philippines continue to outperform its neighbors in the region.
“Looking at the market, the Philippines has 100 million people, a growing middle class, an economy growing around 7 percent every year. Is it a fluke? I don’t think so,” said Maybank Philippines president and CEO Herminio Famatigan Jr.
“So many things can be said about what the government should have done more. But are the conditions there? Obviously. They have a good governance structure and our consumer sector is growing,” he added.
He said the economy’s strong performance would result in high demand for loans, both from businesses and households, due to climbing income levels.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding loans held by universal and commercial banks rose 17.1 percent in January, an acceleration from the 16.4 percent year-on-year expansion recorded the previous month.
Malaysia’s Maybank Banking Berhad, Southeast Asia’s second-largest lender, has tagged the Philippines as one of its growth drivers for the medium term.
Last year, the regional giant’s local subsidiary opened 22 new branches to bring its physical reach to 77 locations around the country. This year, the company wants to bring its network up to 90 branches as it seeks to tap consumers outside Metro Manila.