BUSINESS MIRROR - August 25, 2009

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BPI sees hefty growth of its remittance service from US and Europe

EASILY 10 percent is the growth rate expected by the Bank of the Philippine Islands (BPI) this year, mainly because of money sent by Filipinos in the United States and Europe, an executive told reporters on Monday.

This, despite its weak foothold in the Middle East, which Raul Dimayuga, BPI overseas banking and channel services group senior vice president, said is another growth area the country’s third-largest bank by assets is muscling in on.

“We’re strong in the US and Europe but have not been as strong in the Middle East, where we’re pouring resources in for the past months,” Dimayuga said on the sidelines of a press conference for the 2009 BPInoy Awards.

On its fourth year, the bank recognizes Filipinos overseas deemed exceptional in their profession while working abroad. This year the bank honored White House executive chef Cristeta Pasia-Comerford, Chief Representative for Asia and the Pacific of the Bank for International Settlements Eli Remolona, and artist Anita Magsaysay-Ho.

Dimayuga, however, acknowledged stiff competition will come from banks with remittance services like Al-Rajhi Bank and Saudi American Bank in the Kingdom of Saudi Arabia. Other money-transfer organizations like Western Union and TeleMoney also operate in that country.

According to a World Bank Group web site, Saudi Arabia-Philippines is one of the least costly corridors for remittances, with 26 Saudi rial as the total average fee last year. “We’ve sent a team there to study the market and the possibility of a tie-up,” he added.

Dimayuga said overseas Filipinos remain the driver of the bank’s growth, referring to the 22-percent rate it posted last year. He said roughly $5 billion of money by overseas Filipinos contributed to this growth.

“That’s why we’re very bullish since we’ve not seen a drop in remittances even though it’s been predicted in view of the financial crisis,” Dimayuga said, noting that the crisis pressed Filipinos to send more but “less often” before the crisis. “We noticed that that made us different from migrants of other nationalities. Nagsasakripisyo ang mga Pinoy doon para merong maipadala. [Filipinos further tightened their belts just to send money home.]”

He added that BPI also hasn’t seen a drop in remittances from sea-based workers since “we have seen a drop in trade ships that dried up, and deployment has increased.”

Still, Dimayuga said BPI expects their second-quarter performance to be a “slowdown.” “This is normal even in terms of industry average,” Dimayuga said, adding that BPI expects the banking industry’s remittance business “will continue to grow at least at single-digit levels.” BPI, partly owned by DBS Bank of Singapore, posted a 36.8-percent drop in net income last year to P6.6 billion, from P10 billion in the previous year.

BPI president Aurelio Montinola III was quoted in a BusinessMirror report as saying he expects the bank’s full-year net income is likely to be bigger than last year but less than what it posted in 2007.