Banks have made it easier for people to secure personal, housing, automobile and credit-card loans in the second quarter by relaxing credit terms and requirements, according to the latest quarterly of the Bangko Sentral ng Pilipinas.
The BSP’s “Loan Officers Survey” showed that the banking sector’s growing liquidity resulted in tighter competition among bankers in wooing customers. In the second quarter, banks tended to ease their credit standards.
The improved ability of most individual borrowers to settle their loans prompted banks to ease access to credit, the BSP also said.
The diffusion index for credit standards hit -10 percent in the second quarter compared with the 0 percent reported in the first quarter.
A negative diffusion index indicated that more respondent banks eased their credit standards during the period against those that had tightened lending requirements.
“The slight easing of overall credit standards for loans to households was attributed to increased competition among banks and nonbank lenders, banks’ increased tolerance for risk, and improved credit profile of borrowers,” the BSP said in its report on the survey results.
In assessing a bank’s credit standards, the BSP takes into account its collateral and other requirements, interest rates, size of credit lines, maturity and payment terms.
The BSP’s survey results reflected the growth in actual lending to that market segment during the period.
Outstanding consumer loans hit P238 billion as of the end of June, up by 13.6 percent from the P206 billion of the same period last year.
Also, the BSP reported that credit standards for corporate borrowers remained the same in the second quarter.
The diffusion index for credit standards covering enterprises hit 0 percent in the second quarter, the BSP said. In the first quarter, the index came in at +5.9 percent.
“The latest diffusion index showed unchanged lending standards for loans to firms,” the central bank said in its report.