Banks urged to lend more to tourism, BPOs
The Bangko Sentral ng Pilipinas has urged banks to lend more to the high growth business process outsourcing and tourism sectors as this could boost their income performance this year.
During the government’s economic forum Tuesday, BSP Governor Amando Tetangco Jr. said that there is substantial liquidity in the banking sector, and lending more to BPO and tourism enterprises may be a good way to maximize the benefits of such liquidity.
“There are opportunities for banks to lend to tourism and BPO sectors. Liquidity is available, and banks can use this to lend to tourism, BPO and other sectors,” Tetangco said in a briefing after the forum.
Banks are currently overflowing with cash given their growing profitability and rising deposits from the public.
Evidence of this liquidity is the over P1.5 trillion in funds parked by banks in the special deposit account (SDA) facility of the BSP.
Last year, bank lending grew by close to 20 percent year on year.
Even then, Tetangco said there is still room for growth in credit as banks remain highly liquid.
The BPO sector, which had already risen significantly over the years, is still expected to continue growing over the medium term.
On the tourism sector, government economic managers said it has much room for growth given the country’s numerous tourist destinations.
Tetangco said lending is one of the best ways to support industries. The central bank chief stressed, however, that increasing lending to borrowers from the BPO and tourism sectors should always take into account prudent lending standards, including proper assessment of creditworthiness.
While the BSP sees the benefits of higher bank lending, it wants banks to keep their exposure to loan defaults to a minimum.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.