053107: HSBC upbeat on RP growth outlook, to expand lending and BPO facilities

 

 

By FIL C. SIONIL Making a bullish assessment on the country’s economic outlook, HSBC Philippines said yesterday it was committed to supporting the financing requirements of local firms, its own way of helping perk up business activities in the country. This as visiting Hong Hong-based HSBC Chief Executive Officer for Asia Pacific Michael Smith noted the complete change in the business sentiments on the Philippines. "Things have improved. The outlook is upbeat and very positive," Smith told reporters shortly after the opening of the bank’s eigth network in the Global City inside Fort Bonifacio. "The economic outlook is sound today, Philippine risk ratings outlook is better, and the fiscal arguments is now past us" relative to the situation some 30 months before, dished out Smith, who was here about two and a half years ago. The improving fiscal condition of the state, which Smith described as a much watched "issue overseas" is among the catalyst in turning around business behavior. This sentiment is best mirrored by the substantial reduction in the default swap of the country. As of yesterday, the Philippine five-year debt instrument was carrying a default swap of between 102 and 105 basis point with an average of 103 basis points, more than half of the 250 basis points at the start of 2006. In January 2005, it was at 450 basis points and went up to as high as 800 basis points in 2002, at the height of the huge financial hemorrhage of the national government. Smith, though, hinted vigilance is still needed because the business community is still closing monitoring the revenue performance. "Tax receipts are beign watched," as well as political stability. "I sometimes compare the Philippines with the Latin Amercan nations which are very volatile," admitted Smith. Amidst this, the visiting bank official said HSBC is committed to the country in terms of expanding its banking services and its support group by increasing its Business Processing Outsourcing (BPO) operations. A third BPO is scheduled to be open this coming year, which will increase the total employ of the bank on a consolidated basis to roughly 11 thousand, disclosed HSBC Philippines Chief Executive Officer Mark Watkinson. Specifically, its banking operations employees a total of 2,500 and 5,500 for BPOs. At present, the bank has a couple of BPOs, one in Ayala-Alabang and another in PBCom Tower at the heart of the Central Makati Business District. These two services HSBC’s clients in the United States and United Kingdom. It was explained the Philippines has an edge to service the bank’s US and UK customer base because of the natural talent of the local for speak english as a second language. While both officials refused to provide the amount of investments in BPOs, the capital outlay "is sufficient enough" to support the operations. "There is no limit to capital," Smith said. Watkinson, meanwhile, said the bank is going to expand its reach through HSBC Savings Bank. The regulators have already given their approval for HSBC Savings to openup five new networks in the metropolis hopefully within the year. HSBC is presently operating eight universal branches and 11 thrift bank branches. On the main bank’s operational thrust, Watkinson said the bank is keen in supporting project finance such as energy-related infrastructure-projects like the Magat hydropower in Nueva Ecija. "We have a lot of investors that are interested in making investments. We form a team of advisors that will assess these projects, and then we assemble the prospective investors for the dfferent projects," Watkinson said. However, he made it clear that HSBC will not be involved in the management activities of said projects. He pointed out the case of Clark Air Field as a good example. "Clark is very interesting. In five to 10 years, it has the potential to becoming one of the major international airports in the Philippines," Watkinson said, adding that the key areas for infrastructure are the sectors of tourism, mining, power, toll roads, airports and seaports. But Smith said that Clark can attain the stature "as long as it is connected through world-class roads and railway systems to other major cities in Metro Manila."

 

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