One of the unforeseen challenges of the COVID-19 pandemic has been the continued distribution of goods and services in a safe and efficient manner. Utmost care and responsiveness are required to ensure that both workers and consumers are protected from the virus. This is doubly important in less urbanized areas where the large companies and the national government have difficulty reaching.
Davao-based BDO Network Bank, the largest rural bank in the Philippines, recognized the differing needs of clients of the rural banking sector, who are often lack the options and services available to those in Metro Manila.
“Our overall objective is ‘How can we maintain our capacity to serve our communities as much as we can?’ because we know that unlike banks in the highly urbanized areas where there are a lot of alternatives, in the communities where we operate, there are not enough providers,” BDO Network Bank President Jesus Antonio S. Itchon said.
To address this need, he noted that the lender has first invested heavily in its COVID-19 continuous screening program, including protective gear and vitamins, to ensure the health and wellness of their employees.
“We have also tried to figure out if there are ways under the current conditions where we can fulfill certain customer requests without them having to come to the bank… We cannot wait for the customers to go to the branch. We actually go to our customers,” Mr. Itchon said.
“At a time when most businesses are working from home, most of our employees are out serving the communities,” he added.
Then, to better serve its client base, BDO Network Bank classified its borrowers into two groups: the government employees who avail of salary loans, and the MSMEs for unsecured loans.
“In terms of proportion, we are still quite heavy on government employees’ salary loans. In terms of their impact on our portfolio, as long as the government employees will continue to be employed and draw a salary, that part of our portfolio is going to be okay,” he said.
“The MSMEs, which is a small but growing part of our portfolio because that is what we have started to grow for the last two years, is clearly being challenged by this pandemic… About half are still operating under the IATF guidelines and we do not expect big issues out of that part of the portfolio,” Mr. Itchon said that even with depressed sales, most are still doing quite well like sari-sari stores.
The lender then reconsidered previous plans for its expansion and instead directed its efforts towards rebuilding its operations to better suit the conditions of the ‘new normal’.
“For now, we think that our highest priority is to be there for our customers and the communities that we are serving, which means that our employees need to be protected; our processes and the way we make our services available needs to be safer. We will continue working on those things. We think we are in the right direction, but obviously, there are still a lot of things to do,” Mr. Itchon said.
He mentioned that the central bank’s initiatives during the COVID-19 pandemic had been a huge relief in making this shift of priorities possible. The relaxation of reporting and regulation deadlines, he said, are among the most beneficial of these such initiatives.
Since most banks were working on a skeletal workforce, and thus unable to comply with the necessary rules and regulations on time, the effect of relaxing deadlines was that of relief. In addition, the BSP no longer required the submission of hard copies, allowing banks to send soft copies and emails of all the necessary paperwork.
“One thing that this pandemic has taught us: When the traditional channels and the traditional ways of doing business are disrupted and you cannot afford to not serve your customers, it generates a lot of creativity and resourcefulness,” he said.
“We cannot just continue doing what we have always done. What got us to where we were at the start of this pandemic is not the way we are going to get to our next goal. We have to do it differently,” he added.