Double-digit growth for bank lending seen
More News from Philippine Daily Inquirer
MANILA, Philippines—Bank lending in the country is expected to expand at another double-digit pace in 2013 as industry players have sufficient appetite to extend credit to individuals and enterprises.
This was the view of Aurelio Montinola III, president of Bank of the Philippine Islands and former head of the Bankers Association of the Philippines, citing the growing liquidity of banks in the country that allowed the industry to service growing demand for credit.
He said the total loan portfolio of universal and commercial banks in the country could grow anywhere between 12 and 15 percent this year.
“Drivers of growth in loans will be broad-based. There is demand [for loans] from various sectors,” Montinola told reporters Friday night at the sidelines of the annual reception for bankers hosted by the Bangko Sentral ng Pilipinas.
On concerns that the Philippine economy could be facing risks of overheating because of a robust growth in bank lending, Montinola said there was no solid evidence to prove such fear.
He said lending growth of about 15 percent would still be within comfortable levels and would not cause the economy to overheat.
Montinola said that as a rule of thumb, credit could rise at a pace that was two to three times faster than the growth of the economy without causing worrisome inflation. In the first three quarters of 2012, the Philippine economy grew by 6.5 percent.
“Credit growth of 12 to 15 percent would be fine,” said Montinola, who was named Management Man of the Year for 2012 by the Management Association of the Philippines (MAP).
He added that an asset price bubble in the property market was still remote, contrary to fears raised by some analysts.
Worries that the Philippines could be facing another bubble in the real estate sector, similar to what happened in the late 1990s during the Asian financial crisis, arose following the robust growth in sales of housing units and other real properties over the past three years. The sales were aided by loans extended by banks.—Michelle V. Remo
Get Inquirer updates while on the go, add us on these apps:
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94