BSP says no change in banks’ loan requirements

THE BANGKO Sentral ng Pilipinas reported that there was no change in the requirements banks imposed on those applying for loans in the fourth quarter of 2011 as compared with the previous quarter.

The regulator said that this development would help spur growth of credit by a robust pace this year.

Based on the results of the latest BSP survey on credit standards, the diffusion index stood at 0 percent for both enterprise and individual borrowers, indicating that there had been no tightening or loosening of bank loan application requirements.

This meant that individual and corporate borrowers in the fourth quarter were asked to submit the same loan requirements as those of the previous quarter.

Diffusion index is the difference between the percentage of respondents that reported tightening of credit standards and the percentage of those that relaxed their standards. A positive index, therefore, indicates tightening, while a negative one shows easing.

Loan application requirements, which include collateral and documentary ones, also tend to suggest whether a bank is inclined to reduce or expand its lending activities.

According to the regulator, since there has been no change in banks’ credit requirements, it is confident that the pace of credit growth in 2012 will be more or less the same as the 20 percent reported last year.

Total loan portfolio of universal and commercial banks in the country grew by nearly 23 percent year on year to P2.72 trillion by the end of November 2011, registering the fastest rate of credit growth in over two years.