A ranking official of Rizal Commercial Banking Corporation (RCBC) expects continued double-digit growth this year of consumer loans on the back of the decline of domestic interest rates.
RCBC Consumer Lending Group head Rommel Latinazo said they are optimistic of the sustained robust performance of their consumer business.
He said the decline of domestic interest rates is a plus since it will encourage more people to take loans.
“With the easing of rates demand should further grow,” he said.
In 2018 the bank registered nearly 14-percent growth on consumer loans.
To date, the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) slashed the central bank’s key rates by 75 basis points after hiking it by a total of 175 percent last year due to elevated inflation rate.
Despite an uptick to 3.2 percent last May from the previous month’s 3 percent, domestic rate of price increases has slowed after peaking at 6.7 percent in September and October 2018.
Last September, it decelerated to 0.9 percent from 1.7 percent in the previous month.
Meanwhile, the bank’s consumer loans, which include auto, mortgage and credit cards, totaled to around PHP120 billion in the first half of this year.
Latinazo said loan growth is expected to get a boost from the recently launched Auto and Home Plus, which provides borrowers an insurance coverage for their chosen product for the entire duration of the loan.
He said borrowers will find it easy to pay the insurance premium because it will be included in their monthly payments instead of one-time payment.
For existing RCBC auto loan customers, they may upgrade to this new product that will provide them one-year worth of car insurance. Minimum loan for auto loan product is PHP500,000.
For Home Loan Plus, which comes with a fire insurance, minimum loan amount is PHP1 million. (PNA)