Ultra bilyonaryo Tessie Sy is optimistic on the resilience of Philippine companies which she believes are not yet on the brink of falling into a crisis despite the adverse impact of high interest rates on consumer demand.
“The debts are mostly in pesos this time and it was encouraged during COVID (pandemic). It is something that this administration has inherited so they are trying to control or at least reduce it,” said Sy in an interview with Bloomberg in Singapore.
Sy stressed the Philippines was not yet in crisis mode where a number of corporations have sought to restructure their loans to keep up with their dues.
“We are not in that stage..The companies and industries are still in good shape,” she added.
Sy pointed out that unlike previous crisis years faced by the country, because most of the current corporate debt is denominated in pesos, mitigating exposure to foreign exchange fluctuations.
“It (debt) will grow but we don’t have a lot of foreign exchange though,” she said.
Bangko Sentral ng Pilipinas Governor Eli Remolona had previously expressed concerns about the heightened debt levels.
“There’s some risk that some of them will not be able to pay off their loans. But so far, it’s very manageable,” said Remolona.
His predecessor, Former BSP governor Felipe Medalla, earlier proposed requiring major business groups to disclose foreign debt levels, given lingering concerns about potentially underestimated exposure.
Despite challenges, Sy expressed confidence that the country will weather high inflation and interest rates although she admits “there will always be sectors that will be a cause of concern, but there will always be some new opportunities.”
“It separates the big boys from the smaller ones. For some of those who have consistent business, it doesn’t matter to them because it’s the way they look at their business. But for some of the consumers, yeah, it did affect some of them. Mortgage rates are a bit higher but not so much,” she said.
Sy, who chairs BDO Unibank, reported the bank’s thriving performance amid uncertainties.
“The bank is doing well and it has been supporting a lot of people who want to grow. there’s always opportunities for growth in this type of uncertainties so were looking at that and those are the growth areas,” said Sy
BDO’s profits surged 35 percent year-on-year to P54 billion in the first nine months of the year, showcasing resilience and growth opportunities in the current economic landscape.
