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Keisha Ta-Asan - The Philippine Star
May 19, 2026 | 12:00am
Metrobank treasurer and financial markets sector head Fernand Tansingco said the lender’s outlook has shifted from concerns over margin compression under a lower-rate environment to the prospect of some upside from additional Bangko Sentral ng Pilipinas (BSP) rate hikes.
STAR / File
MANILA, Philippines — Metropolitan Bank & Trust Co. (Metrobank) expects higher interest rates to support margins and keep its earnings on track this year, even as slower economic growth and inflation pressures temper loan demand and could bring asset expansion below its earlier target.
Metrobank treasurer and financial markets sector head Fernand Tansingco said the lender’s outlook has shifted from concerns over margin compression under a lower-rate environment to the prospect of some upside from additional Bangko Sentral ng Pilipinas (BSP) rate hikes.
“Earlier in the year and last year in our earnings calls, we said that we’re going to see yield compression because we were expecting full rate cuts from the BSP this year. I think that the view has now reversed and we’re expecting rate hikes,” Tansingco said during an investor briefing.
“If this high inflation continues, we probably could see a couple more rate hikes,” he said, adding that this could bring benchmark interest rates back to the five percent level.
Tansingco said additional rate hikes could provide a modest boost to Metrobank’s margins, although the benefit would depend on its ability to keep funding costs in check. He estimated that a 25-basis-point policy rate increase could add less than five basis points to the bank’s net interest margin.
“What’s critical here is really managing the funding cost,” he said. “If we can keep funding costs in check, and if deposits rise as they did during the COVID era when business activity slowed, that would be a potential upside for us.”
The bank is also confident that it can still deliver earnings in line with market expectations, provided it maintains its conservative lending posture and avoids a meaningful deterioration in credit quality.
“As long as we keep our credit standards high and avoid bad credits, which we are confident we can do considering that our credit portfolio is top-notch, then we feel that we’re on track to deliver earnings at market expectations,” Tansingco said.
