The Bankers Association of the Philippines on Monday (March 30) told the country’s largest financial institutions to keep their lending rates as low as possible to help keep the economy running amid the COVID-19 pandemic.
In a statement, BAP president Cezar Consing said the impact of the global public health emergency is becoming more apparent on the economy as the Philippines enters the third week of the Luzon-wide enhanced community quarantine.
During the quarantine period, Consing said, “we ask our member banks to do their utmost to maintain reasonable lending rates with the objective of trying to keep such rates as close as possible” to levels prior to the COVID-19 pandemic.
Consing, who is also president of Bank of the Philippine Islands, said banks “have taken extraordinary steps to continue to serve banking customers” even during the lockdown.
Alongside this, the Bangko Sentral ng Pilipinas also reduced both the policy rate and reserve requirements of financial institutions, and took steps to ease the regulatory burden borne by banks.
The BSP has opened rediscounting facilities which can be tapped by banks for liquidity, and has urged these banks, in turn, to extend leniency to their borrowers who may have difficulty settling their loan obligations during and immediately after the COVID-19 lockdown.
The national government, in turn, passed the Bayanihan Act, which gives the executive branch special powers to address the current health crisis.
In his letter, Consing said BAP members must maintain a level of branch presence that allows transactions that cannot be done digitally, as well as keep online banking systems open.
Banks should also ensure availability of cash in their open branches and the majority of their ATMs, he said.
Consing urged banks to “contribute to stable and liquid financial markets” by helping cash circulate in the economy.
“Our country needs our very best efforts in these difficult times,” he said.