**BDO Unibank Anticipates Record Earnings Amid US Tariff Concerns**
BDO Unibank Inc., the largest bank in the Philippines, is optimistic about maintaining record-high earnings this year, driven by robust growth in lending, according to Chief Executive Officer Nestor Tan. In a recent interview, Tan addressed investor concerns regarding the impact of new US tariffs, stating, “It’s not ideal, it’s not what we want but we can live with it.” He expressed confidence that the banking sector would not be significantly affected, although a slowdown may occur.
This month, the US implemented a 19% tariff on Philippine goods, aligning with similar measures against other countries in the region. Despite this, BDO reported a net income of 40.6 billion pesos (approximately $710 million) for the first half of the year, marking a 3% increase from the previous year. The bank’s profit surged 12% to a record 82 billion pesos for the entirety of 2024.
Following the announcement, BDO’s shares, which are a significant component of the Philippine Stock Exchange Index, saw a slight increase after an earlier decline of 2.1%. The stock has experienced a 1.4% drop this year.
Tan emphasized that a stable geopolitical climate and favorable macroeconomic indicators are crucial for attracting investors to the Philippines. He anticipates BDO’s revenues will grow in the low double-digit range this year. “There are two things that we’re looking at. Number one is stability, and we’re seeing that slowly happening. Second is probably a more benign interest rate environment,” he noted.
The CEO expects the Bangko Sentral ng Pilipinas to implement two additional cuts to its key interest rates by the end of the year. He acknowledged that while lower yields may negatively impact profit margins, the hope is that reduced interest rates will stimulate capital expenditure lending, which could compensate for margin compression.
Last month, BDO successfully raised 115 billion pesos through a 1.5-year bond, marking the largest corporate bond sale in Southeast Asia. Tan indicated that this move is part of the bank’s funding strategy, stating, “When we expect rates to go down, we try to keep our liability short.” He also mentioned plans to return to the bond market next year.
The Philippine government has adjusted its economic growth target for the year to a range of 5.5% to 6.5%, down from a previous goal of up to 8%. Bangko Sentral ng Pilipinas Governor Eli Remolona has indicated that there is potential for continued easing in monetary policy next year, following two more quarter-point cuts anticipated for the remainder of 2025.
**FAQ**
**What is BDO Unibank’s outlook for earnings in 2024?**
BDO Unibank expects to achieve record-high earnings in 2024, driven by broad-based growth in lending, despite concerns over US tariffs.