Elevator Pitch
I assign a "Neutral" rating to Philippines-listed Bank of the Philippine Islands (BPHLF) [BPI:PM] or BPI. I like BPI's advantages in cost of funding and operating cost management, which gives the bank an edge in growing its loan book. Loan growth is expected to improve from the high single digit in 2019 to the low teens in 2020, due to a rate cut, infrastructure project roll-outs, and a reduction in reserve requirement ratio, or RRR.
However, BPI's loan exposure to Manila Water (MWTCF) (MWTCY) [MWC:PM] and its prior partnership with LitePay are key