MANILA, Philippines--Banks ceased to tighten credit standards in the third quarter when the global economy started showing signs of recovery and eased concerns on lending.

According to the latest Bank Loan Officers Survey conducted by the Bangko Sentral ng Pilipinas, lending institutions implemented a status quo in the third quarter on requirements sought from people and companies applying for loans.

“Bank credit standards remained basically unchanged for enterprises and households for the third quarter compared with that in the second quarter,” according to the central bank, citing results of the survey.

Earlier in the year when the global financial crisis was in full swing, raising risks of default in loans, banks tightened credit standards, such as by asking for higher amounts of collateral and more supporting documents from borrowers, the BSP said.

The tightening of credit standards did not lead to declines in loans extended by banks, but it did considerably slow down growth of credit, the BSP said.

As of end-August, outstanding loans extended by commercial banks to individual and corporate borrowers amounted to P1.94 trillion, up by only 5.9 percent from that of the same period a year ago.

In 2008, lending grew well above 20 percent.

The BSP conducts the survey on a quarterly basis to determine credit conditions in the country. Respondents to the survey are senior bank loan officers of major commercial banks.

According to the central bank, the fact that credit was still growing showed that the credit crunch, had little effect on the Philippines.

The BSP said bank loans were still helping support the economy, which grew by 1.5 percent in the first semester of the year.

Also, monetary officials stressed that bank lending would not register a decline this year.