Banks brave the front lines

It’s a job that some people just have to do to keep the economy going at this time that Luzon and other parts of the country have been locked down to contain the coronavirus di­sease (COVID-19) pandemic.

“There is a reason that the banking industry was carved out of the enhanced community quarantine program. The banking industry must conti­nue to operate even under the most difficult of circumstances if our economy is to continue to function. There are businesses and consumers to finance, payrolls to be met, bills to be paid,” Bankers Association of the Philippines president Cezar Con­sing said in a March 27 message to the banking community.

Consing, who is also president of Bank of the Philippine Islands, is the general motiva­ting the soldiers on the ground. It is, after all, a world war against COVID-19.

“Stand by your posts! Even if this means hurdling checkpoints to join the skeleton forces in the head office units or to help staff the designa­ted branches that must remain open. If our head office units are insufficiently staffed, our branches and ATMs (automa­ted teller machines) will cease to function. Not everything can be done digitally, at least not right now,” Consing said.

Beyond the checkpoints, commuting is a big challenge for bank personnel at this time, especially for rank-and-file workers who previously relied on public transportation. Each bank has to devise its own carpooling arrangements to bring these people to the branches.

Apart from personnel who need to run the branches, Con­sing said working from home as part of split team arrangements, rotation plans or business continuity planning (BCP) processes was also part of overall efforts. He said such output from home was valuable, and in many cases, as time-sensitive as work done in the head office units and the branches.

But the job that presents the highest risk of getting infected is that which requires person-to-person contact, especially in the branches.

“As wired as we are as a people, we still depend on our branches. Bank managements have done a pretty good job of minimizing health risks to employees—via frequent cleaning, social distancing, introduction of physical barriers, face mask requirements, disinfectants—but there is no eradicating the health risks completely. Care and courage—these must be our bywords,” Consing said.

Bank on wheels

Some banks have turned creative in bringing the liqui­dity to their clients. Philippine National Bank’s (PNB) “Bank on Wheels,” for instance, is especially helpful at this point, said PNB president Jose Arnulfo Veloso.

This refers to vehicles with ATMs.

“We deploy them where there is cash needed by the public,” Veloso said.

The program was launched a few years back but it has pro­ven especially helpful these days that people’s mobility is constrained.

“We locate them in areas where we get feedback of inaccessibility to cash as a whole, and not by PNB,” Veloso said.

As part of the bank’s business continuity planning, a skeleton workforce was stationed at the PNB head office in Macapagal in Pasay City.

One of PNB’s employees in the head office had already tes­ted positive for COVID-19 infection.

The employee has been under voluntary quarantine since March 1.

“PNB takes this matter seriously. Our focus has always been to contain the spread of the virus by working with the Department of Health (DOH) and the Pasay City authorities. We have done a top-to-bottom disinfection of the PNB head office and we are constantly disinfecting our branches and offices nationwide. Identified primary contacts were asked to go into self-quarantine. They are being closely monitored, provided guidance and assistance. There have been no further reports of any COVID-19 infections from this exposure,” the bank disclosed.

Other banks that have disclosed at least one case of COVID-19 infection among their employees are BDO Unibank and Standard Chartered Bank Philippines.

‘Loan ranger’

As other cities outside Luzon have shut down their borders as well, City Savings Bank, a unit of Union Bank of the Philippines, continues to process loans for customers with urgent needs using a unique len­ding facility called “Loan Ranger,” which allows sales associates to physically go to areas to process and approve a loan.

In a way, this replicates the strategy of motorcycle-riding informal lenders that go around the communities to lend and collect money.

“Our lives have come to a standstill as we battle COVID-19 but I know that we at CitySavings have been working tirelessly to ensure that service to our customers remains unhampered. Our sales associates—loan rangers—now meet up with clients near checkpoint borders to process loans and they use our Loan Ranger application,” said Lorenzo Ocampo, CitySavings president and chief executive officer.

To date, there are 188 loan rangers deployed in Luzon and 109 in Visayas and Mindanao. And since the enhanced community quarantine was implemented, CitySavings has been able to release 4,435 teachers’ salary loans.

“The loan will help me a lot, particularly in this time of crisis where I need to buy food, my maintenance medicine, and important household necessities. I feel so relieved because of CitySavings’ service. It was excellent and beyond my expectation,” said Concepcion He­chanova, a teacher at Polomolok Creek Integrated School.

“They did not think twice to accommodate my loan application and met me personally despite the risks that the current situation brings. Their act of service is a testament of their love for us teachers. Thank you for your concern,” said teacher Melanie Maranan from Ilat Elementary School in San Pascual, Batangas.

CitySavings also continued to deliver motorcycle loan services to clients. The bank announced earlier its extension of a 30-day loan payment moratorium for motorcycle loan borrowers in good standing.

Waiver of fees

To help consumers and small entrepreneurs cope with the monthlong lockdown of Luzon amid the COVID-19 pandemic, a number of Philippine banks have also given qualified borrowers a grace period on loan payments while some even waived ATM and other money transfer fees.

BDO Unibank offered the longest grace period of 60 days, covering credit card, auto, home, small and medium and personal loan customers with due dates of up to April 15.

BPI, Metropolitan Bank and Trust Co., Philippine Savings Bank, East West Bank, Rizal Commercial Banking Corp., China Bank, Citibank and Uni­ted Coconut Planters Bank all offered loan payment extension of up to 30 days, mostly for qualified consumer loans. PNB approved a 30-day grace period on credit card payments.

“Remember that true cha­racter comes through in tough times. This means continuing to care for our customers’ deposits by ensuring that we make credit­worthy loans, and paying a fair price for their deposits. This means charging our borrowers a fair interest rate, one that reflects funding conditions as well as credit risks. And in these extraordinary times, it may well mean a preparedness to reduce our net interest margins. Same for fees and commissions. Everyone is tightening their belts. We have to do the same,” Consing said.

Mission-critical

And while banks are battling COVID-19 from the front lines, they are also battling enemies in the digital space. As some clients shift to digital transactions, many banks have flagged the rise of phishing incidents, perpetuated by scammers who are taking advantage of the current crisis to steal people’s identity and money.

This while banks are battling risks of rising loan defaults. To date, global credit watchdog has revised its outlook on the Philippine banking sector for 2020 to “negative” from “stable” amid a deteriorating operating environment. Bank revenues are seen under pressure from declining interest rates and the resulting economic slowdown, as the lockdown of Luzon—which accounted for more than 70 percent of the nation’s output—dents business operations.

Consing acknowledged that this crisis would test the quality of banks’ loans, the marks of their securities, the sufficiency of their capital, and the resiliency of their operations and their people.

“We want to emerge from this crisis with our strength and stability unquestioned. The more positive things we do now, the more pitfalls we can avoid at this time, the better prepared we will be to help in the economic recovery that is sure to come. We owe it to the place we call home to be constructive, impactful and meaningful in the post-COVID world,” Consing said.

“Fellow bankers, ours is a mission-critical industry. What we do and, equally important, what we choose not to do, will help shape our nation going forward.”