The Union Bank of the Philippines (UBP) is strengthening its financial safeguards as global uncertainty rises due to the ongoing Middle East conflict, a senior executive said.
Manuel R. Lozano, chief financial officer at Union Bank, said local lenders have focused on boosting capital, maintaining liquidity, and protecting earnings as consequence.
He noted the various lenders remain well-capitalized, helping reassure depositors and investors despite volatile markets and uncertain interest rates.
The banks have also ensured enough liquidity to support customers who may need access to funds, while preparing for possible credit risks linked to the conflict. Lozano said lenders have shifted from aggressive expansion to more cautious growth, tightening credit standards and being more selective in lending—similar to strategies used during the COVID-19 pandemic.
Union Bank, he said, has already reviewed its exposure to vulnerable sectors and tightened lending rules. It is also maintaining strong liquidity, strengthening system resilience, and managing costs through measures such as energy efficiency and flexible work setups.
The bank reported strong performance from its acquired consumer business from Citi, which has increased revenues and customer activity. Union Bank is now among the top three credit card issuers in the country and is focused on expanding services for its more than 18 million customers.
Meanwhile, its partnership with ATRAM Group is enhancing its wealth management offerings. The integration provides access to a wider range of investment products and expertise. Following the merger’s completion in mid-2025, Union Bank is set to become the fourth-largest asset manager in the Philippines by assets under management.
Despite global headwinds, Union Bank remains optimistic about the banking sector’s long-term prospects, citing strong balance sheet, digital innovation, and favorable demographics in the Philippines.
However, Lozano warned that rising interest rates and prolonged geopolitical tensions—particularly involving Iran—could affect borrowing costs and delay client investments. While the full impact has yet to be felt, banks are preparing for potential risks.
“Discipline and resilience remain key as the situation evolves,” Lozano said, noting that the sector is positioning itself to withstand volatility while remaining ready for future growth.
