Quantcast
Latest Stories

Banks’ loans from Bangko Sentral up by 75%

By

Loans secured by banks from the Bangko Sentral ng Pilipinas surged in the first two months of the year, as the historic-low interest rates encouraged borrowing activities.

Banks are expected to use the additional liquidity to serve the growing demand for credit from both corporate and individual borrowers.

Official data showed that peso-denominated loans extended to banks through the rediscounting facility of the BSP had reached P8.1 billion in January to February, up by 75 percent from P4.63 billion in the same months last year.

Dollar-denominated loans extended under the same facility reached $34.3 million, up by 72 percent from P19.9 million.

The rediscounting facility of the BSP is intended to support lending operations of banks. The amount extended to a borrowing bank is the discounted value of collectibles that serve as collateral.

The interest rates on the peso- and dollar-denominated loans stood at record lows of 3.5 percent and 0.2 percent, respectively.

The former was set equal to the BSP’s key policy rate, which hit an all-time low last year following a series of rate reductions by the central bank’s Monetary Board.

The rate cuts were meant to make loans cheaper, thus encourage consumers and enterprises to borrow. Policymakers said boosting domestic consumption and investments, which were aided by loans, would partly shield the Philippine economy from the adverse effects of global economic problems.

Last year, the Philippines expanded by  6.6 percent, exceeding targets, despite a weak global economy.

For this year, the government expects the economy to grow by 6 to 7 percent.

Officials said the banking sector would continue to support economic growth through lending. The BSP and industry players expect bank lending to post double-digit growth this year.

Officials said the substantial increase in loans tapped by banks from the BSP signaled the banks’ intention to further boost their lending businesses. They said appetite for lending among banks remained significant given the favorable outlook on the economy.

The BSP earlier reported that outstanding loans from universal and commercial banks reached P3.24 trillion as of the end of 2012, up by 16.2 percent from P2.79 trillion a year ago.

In the meantime, robust lending activities in the country over the past few years have elicited concerns that the Philippine might be facing the risk of overheating.

The BSP, however, shrugged off these concerns, saying there remained a huge room for credit expansion in the country.

BSP Governor Amando Tetangco Jr. earlier said that considering that banks were starting with a low base, they had the flexibility to maintain double-digit growth in lending without causing inflationary problems.

Credit-to-gross domestic product ratio in the Philippines, Tetangco said, stood at only about 30 percent (credit refers to outstanding loans from financial institutions). In some emerging economies, he said, the ratio exceeds 100 percent.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: banks , Business , Interest Rates , Loans

  • investor888

    With loans up, we may see further liquidity in the market that may further sutain the current economic growth.  With the borrowings up, this is positive for the banking, power, consumer, property & other sectors on the economy.



Copyright © 2014, .
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
Advertisement
Advertisement

News

  • Saudi Arabia reports 3 more deaths from MERS virus
  • Suspect in Vhong Navarro’s mauling wants to turn state witness – De Lima
  • Why are Americans obsessed with missing plane?
  • Napoles to have surgery on Tuesday – report
  • Mayor’s assassination linked to black sand mining controversy
  • Sports

  • PBA D-League: Waves edge skidding Superchargers
  • Ilad’s last-second basket lifts Gems over Bakers
  • Reigning champs Miami open playoffs with win
  • Spurs subdue Mavericks in playoff opener
  • Wawrinka beats Federer to win Monte Carlo Masters
  • Lifestyle

  • Miss America: Don’t suspend teen over prom invite
  • Transitions and resurrection in the performing arts
  • ‘Archaeology tour’ of Cebu’s heritage of faith
  • Historic Fort Bonifacio tunnel converted into a septic tank
  • ‘Imports’ from London, and play of the year
  • Entertainment

  • Arrest warrants out vs. Deniece Cornejo, Cedric Lee, et al over serious illegal detention
  • Lindsay Lohan says she had a miscarriage
  • Discovery network cancels Everest jump
  • ‘Captain America’ stays strong atop US box office
  • Easter musings
  • Business

  • Century Pacific Food sets IPO price at P13.75 per share
  • Oil prices down in quiet Asian trade
  • Asian shares mixed in holiday-thinned trade
  • BDO seen keen on bidding for Cocobank
  • Bataan freeport investment pledges up 1,302%
  • Technology

  • PH has slowest internet in Southeast Asia
  • Nintendo’s trailblazing Game Boy marks 25th anniversary
  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Opinion

  • Gigi’s home
  • Palace stonewalls on MRT inquiry
  • Couple of things too
  • There is plenty of water behind Wawa Dam
  • Triduum thoughts of a young boy
  • Global Nation

  • Filipinos in Middle East urged not to panic amid MERS-CoV scare
  • Obama on mission to quiet Asia skeptics
  • Search for Etihad passengers launched
  • Japan presents $57-B ‘dream plan’ to solve Metro congestion
  • Tim Tebow’s charity hospital in Davao seen to open in 7 months
  • Marketplace