MANILA – Tan-led Philippine National Bank (PNB) posted higher loan loss provisions in the first quarter of 2020, which an executive attributed to the bank’s macroeconomic outlook for the year amid the pandemic.
During the bank’s virtual annual stockholders meeting Tuesday, PNB chief financial officer Nelson Reyes assured stockholders that the PHP3.4-billion loan loss provisions in end-March this year, which is higher than year-ago’s PHP346 million, “is not reflective of the bank’s asset quality nor of its credit procedures.”
“Rather, it is an indication of the deterioration in the bank’s assessment of the macroeconomic outlook as a result of the impact of the global pandemic and the impact of the domestic balance in determining the loan loss provisions of the bank,” he said.
In the first quarter this year, domestic growth, as measured by gross domestic product (GDP), contracted by 0.2 percent, the first negative output since the last quarter of 1998.
Economic managers have revised their growth projection for the Philippine economy to a contraction of between 2 percent to 3.4 percent this year, but a recovery of 7.1 to 8.1 percent is expected next year given the strong macroeconomic fundamentals and the PHP1.7-trillion four-pillar recovery program.
Meanwhile, PNB president and chief executive officer (CEO) Wick Veloso, during the same event, said digital processes are now a big part of the bank’s operations, especially with the pandemic still wreaking havoc around the globe.
Veloso said the bank continues to operate on a “business-as-usual mode” even as most of their personnel are working remotely.
He said a Covid-19 command center was put up when the enhanced community quarantine (ECQ) was announced in the middle of March, and this allowed their personnel to continue with their tasks of providing quality financial services to their customers.
“We were able to work closely with customers on programs intended to relieve financial pressure on their businesses while mitigating what we expect to be increasing credit risk within the loan portfolio. All these, while working from home,” he added. (PNA)