Bank says PH needs more investment-friendly policies
Standard Chartered Bank said the Philippines had to implement more policies that would make it easier for firms to invest in infrastructure and other big-ticket projects.
The international financial services firm said the Philippine banking sector was awash in cash and there was desire among industry players to lend much more. However, it said, credit was not growing as fast as desired because of limited demand.
“Accelerated growth in lending requires enabling policies for infrastructure investments. Liquidity is not the problem, and banks want to lend,” Neeray Swaroop, chief executive officer of Standard Chartered for Southeast Asia, told the Philippine Daily Inquirer.
In 2011, growth in the loan portfolio of the banking sector grew by nearly 20 percent, the fastest pace in more than two years.
Regulators said, however, that banks in the country should register even faster credit growth rates—without letting go of prudent lending standards— to better aid in the economy’s expansion. They said there remained a significant room for banks to increase lending.
Swaroop agreed that banks had the capacity to accelerate growth in lending, but added that demand for loans must increase so that the desire for even faster growth in credit would be realized.
He urged the Philippine government to come up with policies—such as incentives or rationalization of investment procedures—that would make it more attractive for large companies to invest in public infrastructure projects or other developmental initiatives.
“Infrastructure is still a big area for investments in Southeast Asia. More needs to be done to have more investments in infrastructure,” Swaroop said.
In the Philippines, infrastructure spending was estimated to be less than 3 percent of the country’s gross domestic product. In most Southeast Asian countries, infrastructure spending-to-GDP ratio is at least 5 percent.
The Aquino administration is pushing for higher investments by the private sector in public infrastructure through the Public-Private Partnership (PPP) program. The government is targeting to implement 10 PPP projects starting this year, with the aim of speeding up growth of the economy following last year’s slowdown.
