BPI eyes up to P1.5T in wealth management by year-end

The Bank of the Philippine Islands aims to attract investments worth up to P1.5 trillion by year-end under its wealth management business.

Tere Marcial, president and chief executive officer of BPI Wealth, said the BPI’s fund manager would be building on its momentum, which has grown to P1.2 trillion in assets under management from corporate clients.

Meanwhile, she said BPI’s other subsidiaries have gained P1.45 trillion.

BPI Wealth invests funds from individual and corporate clients in equities, bonds, or both for short-term and long-term gains.

“I think we’re going to be about P1.45 to P1.5T by year-end for the whole wealth management business of the BPI group,” Marcial said last Friday during the BPI Investival, a financial literacy campaign on investing held at Greenbelt 5, Makati City.

Marcial believes the next six to 12 months will be profitable for bond investors, maximizing gains from the likely high interest-rate environment in the near future.

“It’s a good opportunity to lock in long-term duration in fixed-income investments because six to 12 months down the road, we expect policy rates to be cut,” she said.

“So, your lock-in medium-to-long-term rates will experience positive appreciation,” Marcial explained further.

The Bangko Sentral ng Pilipinas, or BSP, has raised its policy rate by 425 basis points to 6.25 percent to slow down inflation, which peaked at 8.7 percent in January and re-accelerated to 6.1 percent in September.

Marcial expects the BSP to raise its rate this year due to recent inflationary risks, such as the Israel-Hamar war-induced oil price hikes and higher rice prices due to global export restrictions on the commodity.

The BSP usually also matches policy decisions by the US Federal Reserve to maintain healthy foreign exchange and attract investments to the Philippines.

“You can purchase medium to long-term bonds at higher rates than we’ve seen in the last ten years. There’s a possibility of another rate hike in the US and another rate hike in the Philippines, maybe one this year,” she said.

A recent survey by Reuters from 13 to 18 October among 111 economists showed the majority believed the Federal Reserve would cut its rate before the second half of next year, while 45 percent expected it to start in the middle of next year.

Meanwhile, over 80 percent expected the US central bank to keep its rate at 5.25 percent to 5.50 percent in its meeting on 1 November.

Some economists argued the Federal Reserve will raise its rate this year to prevent faster inflation due to likely higher consumption of goods and services following wage increases among Americans.

On the other hand, BSP Governor Eli Remolona Jr. said the faster September inflation was “significant,” which encourages the BSP’s Monetary Board to consider a rate hike this year.

Marcial also hoped the public would be encouraged to invest with a minimum initial fund of P1,000 through the new BPI mobile app.

She said the app allows clients to set a certain amount to be invested regularly and monitor and redeem returns on their investments.

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