BDO is 'paranoid' about big foreign lenders in the country

With more foreign lenders expected to enter the country in the coming years, BDO Unibank Inc., the largest Philippine bank in terms of assets, on Thursday said it is accelerating investments to address the competition.

"Yes, we are paranoid. That is the reason we are accelerating our investments. We believe we have a headstart, but at some point it won't last for long," BDO President and CEO Nestor V. Tan told reporters in Makati City.

More foreign lenders are set to enter the Philippine market under the Association of Southeast Asian Nations (ASEAN) Banking Integration Framework (ABIF).

The ABIF dictates the underlying principles governing QABs (Qualified ASEAN Banks), ensuring compliance with global banking standards, as well as prudential regulations of both the host and home countries.

The ABIF enjoins each ASEAN-5 country – Indonesia, Malaysia, Philippines, Singapore and Thailand – to hammer out at least one bilateral agreement with another ASEAN-5 country by 2018.

Earlier this month, the Bangko Sentral ng Pilipinas (BSP) signed a bilateral agreement with Bank Negara Malaysia (BNM) to allow the entry of QABs between the two countries.

The central banks of the Philippines and Thailand also signed a letter of intent to start bilateral discussions on opening their respective banking industries to each other.

With enhanced competition and higher interest rates in the offing, Tan said BDO has moved to address such concerns.

"We shrunk our portfolio, shortened duration of our investments so we don't want to be caught in rising interest rates environment," he said. — VDS, GMA News