LT group banks on BSP rate cuts for rosier year

FILE PHOTO: A security guard stands beside a logo of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) posted at the main gate in Manila, Philippines April 28, 2016. REUTERS/Romeo Ranoco/File Photo

Tycoon Lucio Tan’s LT Group Inc. expects the projected decline in interest rates to temper high costs this year and boost earnings in its various businesses.

Lucio Tan III, LT Group president and chief operating officer, on Friday said their outlook for the year was “more optimistic,” especially with the Bangko Sentral ng Pilipinas (BSP) anticipated to cut policy rates in the latter part of 2024.

“It should positively impact LT Group’s different businesses, and help stabilize and even grow our volumes,” he said during the company’s annual stockholders meeting.

LT Group has interests in banking, tobacco, liquor and property.

“With inflation expected at 3.8 percent in 2024 and interest rates also expected to go down, the outlook for 2024 is more optimistic,” Tan added.

During the Monetary Board’s April 8 meeting, regulators maintained the BSP’s benchmark rate at 6.5 percent to help lower inflation amid a renewed uptick.

In 2023, the company booked relatively flat earnings at P25.42 billion, up by just 1 percent as its tobacco business saw lower net income.

According to LT Group, an industry-wide price increase pulled down the earnings of tobacco unit PMFTC Inc. by 26 percent to P11.36 billion.

The 30-year-old grandson and namesake of founder Lucio Tan was appointed the president of LT Group last year after his yearlong stint as COO and vice chair.

He replaced his uncle, Michael Tan, who had been the conglomerate’s president for over a decade. Michael remained a director of LT Group and president of Asia Brewery Inc.

Lucio III also vowed to “be guided by the values of integrity, diligence, excellence and transparency” under his new role in the company formerly known as Tanduay Holdings Inc.

Also, his message came a day after banking unit Philippine National Bank (PNB) reported a 10-percent increase in first-quarter earnings, which reached P5.3 billion.

This was due to slight gains in its loan portfolio and better yields, PNB said in a stock exchange filing on Thursday.

“This year is exciting for the bank as we embark on expanding our reach to the small and medium enterprises as well as in consumer lending,” said Francis Albalate, PNB executive vice president and chief financial officer.

PNB’s core income in the January to March period grew by 7 percent to P12.9 billion.

Net interest margin also ended at P11.7 billion, up by 12 percent, while yields increased by an average of 47 basis points.

At the same time, net loans inched up to P610 billion from P609 billion.

Total assets stood at P1.2 trillion as of end-March, 1 percent lower than the previous quarter. —Meg J. Adonis 

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