Banks itching to lend more to support PPP program—BAP
Alberto Villarosa: Banks lending more this year PHOTO FROM SECURITYBANK.COM
MANILA, Philippines—Members of the country’s banking sector are keen on extending loans to contractors of big-ticket, public infrastructure projects and their suppliers, expressing their appetite for higher lending this year.
According to Alberto Villarosa, newly elected president of the Bankers Association of the Philippines (BAP), banks intend to lend more this year to maximize profitability. As a result, most institutions are eager to support the government’s Public-Private Partnership (PPP) program, under which private enterprises are invited to invest in public infrastructure projects.
“There is significant room for lending growth, especially on account of interest to support PPP projects themselves and the entire supply chain,” Villarosa told reporters Monday night after the BAP’s membership meeting and election of officers.
Villarosa, who is also president of Security Bank, said that apart from public infrastructure, the sectors of trading, agriculture and manufacturing are also areas of interest for banks as far as higher lending is concerned.
He said bank lending would likely grow by about 10 to 15 percent this year.
“Last year, lending growth was faster…,” Villarosa said.
Despite robust credit growth by about 20 percent year on year in 2011, banks in the country are being urged to lend more given their enormous liquidity.
The World Bank earlier said that the country’s banking sector was not lending enough. The sector has the ability to support faster growth of the economy by using its available resources to extend more credit to enterprises and to support job-generating investments.
The sector is extremely liquid. It has been reported that banks have parked an estimated P1.7 trillion with the Bangko Sentral ng Pilipinas’ special deposit account facility.
