MANILA, Philippines - Bank of the Philippine Islands, the country's third biggest lender by assets, could increase net income by up to 15% this year if national elections in May are peaceful, its president said.

Growth in lending to consumers and small- to medium-sized firms should be in step with projected profit growth, but corporate loan growth may only be 5% to 10% as companies use debt to raise funds, Aurelio Montinola said on Thursday.

"If the elections are peaceful and orderly, we will have an opportunity to grow our net income by up to 15% and if not, then we will be more cautious and go with our usual 10% goal," he told reporters after a shareholders' meeting.

"On investment banking, hopefully if elections are peaceful and orderly, there will be again tremendous interest and I foresee there will be a lot of investment banking deals, financial market is opportunistic," he said.

The Philippines hold national and local elections on May 10. There are concerns an automated voting system being used for the first time may fail due to lack of voter education and technical glitches, which could lead a disputed outcome.

Net income at BPI, owned by Philippine conglomerate Ayala Corp and Southeast Asia's biggest bank, Singapore's DBS, is forecast to reach P9.8 billion ($220 million) this year, up 15% from P8.5 billion in 2009, based on the mean estimate in Thomson Reuters I/B/E/S.

Montinola said business volume in the first quarter had been "surprisingly strong," but did not provide specific numbers.

"We've said people will be cautious because of the elections but mood seems to be positive, based on credit request for additional facilities," he said.

"People are preparing to do more things going forward, auto sales up 35%, but you have to remember Q1 2009 was very weak."

The bank is aiming for double-digit loan growth this year, Montinola said. Bank lending by universal and commercial banks, net of placements in the central bank's reverse repurchase window, grew an annual 6.1% in February. 

Shares of BPI slipped 1.1% on Thursday, underperforming Manila's main stock index, which edged down 0.6%.