Bank of the Philippine Islands (BPI) is in no hurry to cross the country’s borders to get to new markets, even as some of its companies in the Ayala group draw up their Southeast Asian aspirations.
Other local conglomerates have also been expanding their reach in Asia in the past two years, with the country’s tycoons eager to take advantage of cheap local funding to grow their markets.
Senior BPI officials on Wednesday stressed the company’s top priority this year was cementing its position as one of the country’s leading financial institutions, growing both organically and through local acquisitions.
“It doesn’t do us any good to try to branch out unless we know we are really strong here,” BPI president and CEO Cesar Consing said in a briefing on Wednesday.
Speaking at the sidelines of BPI’s shareholders’ meeting, Consing said the future of the bank, although bright, would remain inside the Philippines.
BPI’s reluctance to expand its reach comes amid the recent approval of a multilateral deal that liberalizes the region’s financial industry.
The Association of Southeast Asian Nations (Asean) Banking Integration Framework (ABIF) was approved by the region’s central bank governors in Kuala Lumpur last month. This paves the way for countries to start bilateral talks with neighbors to agree on more detailed terms over the operations of their banks.
On the domestic front, Congress lifted most restrictions on the entry of foreign banks in the country. Regulators have approved the entry of at least three new foreign banks.
These new rules come amid efforts of Asean countries to form a more integrated economic community. Other Ayala-led firms have been keen to take advantage of closer ties with the nation’s neighbors.
Last year, the Ayala group’s water utility arm, Manila Water, announced it would spend P10 billion in the next three years to finance its domestic and Asean expansion.
Outside the Philippines, Manila Water operates a joint venture with a state-led agency in Vietnam. Indonesia and Myanmar have also been tagged as prime new markets for Manila Water.
Consing said BPI’s focus this year would be strengthening its local base. The firm is also open to bargain acquisitions.
Last year, BPI’s profits dipped by 4 percent to P18 billion as trading gains thinned due to rising interest rates.