August 25, 2024 | 12:00am
Amid strong growth story, favorable market conditions
MANILA, Philippines — Global banking giant Citi has found a lucrative market in the Philippines and expressed continued confidence in the country’s growth prospects, citing strong local talent, global business interest and an optimistic economic outlook.
Jan Metzger, Citi’s head of investment banking in Asia-Pacific, said the bank’s success is anchored on the country’s strong economic fundamentals and favorable market conditions.
“The Philippines is a market where our franchise is doing very well, driven by a strong underlying growth story and great market dynamics locally,” Metzger told The STAR.
Citi’s ability to cater to both domestic firms and multinational corporations has been a key driver of its success in the region.
“We’re honored to be able to serve both domestic companies as well as international companies coming into the Philippines,” he said. “We’ve done that for a very, very long time and continue to do so.”
Citi has been in the Philippines for over 122 years or since July 1902. It has grown to be the largest foreign bank in the country in terms of assets with a business that spans corporate banking, markets as well as transaction banking and securities services.
Citi has also expanded its presence via the Citi Solutions Center (CSC), with an employee population of nearly 7,000. The centers help service Citi businesses all over the world.
“The Philippines remains crucial to Citi, both in terms of serving Filipino clients and supporting the business outside the country,” Metzger said.
CSC Manila delivers financial, technology and training services to Citi affiliates, subsidiaries and branches in over 90 countries in various regions, including Asia-Pacific, Europe, Middle East, Africa, Latin America/Mexico and North America.
It is also the largest offshore voice operations site for Citi, which provides customer service, credit, collections and sales services to Citi businesses in Singapore and North America.
Asked for his outlook for the bank’s business in the country, Metzger said Citi is positive on the Philippines in the short, medium and long-term.
“Asia is going to grow faster than the rest of the world and the Philippines is growing at roughly six percent, which is already a good growth rate,” he said.
He said there is several great services businesses in the country, particularly business process outsourcing (BPOs). Some of those businesses will change due to the wider adoption of artificial intelligence and automation.
“I think the Philippines will manage that transition well and move to higher value-added work,” he said. “If you think about a metric of revenue per employee, I think that’s going to go up too.”
Many of the industries that the Philippines is strong in and has a comparative advantage in, are also still under-penetrated, he said.
Foreign companies also find it more straightforward and welcoming to do business in the Philippines rather than other places around the globe.
“We’re keen to acquire new clients. We’re keen to grow market share with our existing clients. And we want to be the partner of choice for international companies that are coming to the Philippines,” Metzger said.
In the long term, Metzger said he is also positive on capital raising activities in the country.
“The Philippines is creating new and exciting companies – new kinds of tech companies, BPO companies, and consumer companies – that will ultimately need capital raising,” he said.
He said that equity capital markets are not that constructive for initial public offerings (IPOs) globally due to high interest rates. In the short term, the global markets could be a bit more challenging to raise money in.
“But in the long run, all of these exciting companies that are being created in the region and in the Philippines will all be prime candidates for IPOs,” he said.
Meanwhile, Metzger sees wide opportunities for their Philippine clients with the local talent pool attracting global businesses into the country.
“If you think about the BPO industry, which is an important client of Citi’s, they’re doing work for companies all over the world, and they have massive operations in the Philippines,” he said.
“We’re very excited to help with that kind of work, which is going to become, in a world of AI, more and more value-added. A lot of the routine tasks are going to be automated, because of which you are going to get a higher level of quality work replacing it. I think that’s actually really quite exciting and beneficial to the market.”
Citi in the Philippines banks over 950 multinational companies as well as the country’s top local corporations. It has also become the bank of choice of 90 percent of the top 20 companies in the country by listed market cap.
Since 2020, the bank has raised over $10 billion for Philippine issuers from global capital markets for both sovereign and corporate issuers. Citi has also been the sole settlement bank for dollar transfers for the past 30 years.
“The strategic goal for the next five years is to be the pre-eminent bank and the partner of choice for our global and local clients, supporting them wherever they choose to do business,” Metzger said.
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