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MANILA, Philippines — The lending standards of banks for businesses and households remain unchanged for the third quarter, after a tightening in the first quarter, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.
The Philippine central bank said in its latest Senior Loan Officers Survey that commercial banks retained their credit standards for both enterprises and households in the third quarter of the year.
This is the 26th consecutive quarter since the second quarter of 2009 that majority of banks reported broadly unchanged credit standards, BSP’s Department of Economic Research deputy director Dennis Lapid said.
Since 2009, the BSP has been conducting a quarterly survey to help consumers understand the lending behavior of universal and commercial banks – which is an indicator of the Philippines’ credit activity.
The quarterly survey also helps the BSP assess the robustness of demand conditions, potential risks in the asset markets, and possible strains in the bank lending channel as a transmission channel of monetary policy.
In the BSP’s latest survey, Lapid said that overall credit standards for loans to enterprises were unchanged, while loans to households showed some easing.
The survey revealed that 87.5% of the bank respondents said credit standards for loans to enterprises were kept unchanged in the third quarter.
Lapid said banks attributed the steady credit standards to their unchanged tolerance for risk and stable economic outlook.
Meanwhile, BSP’s Lapid said about 87.5% of the respondents reported unchanged credit standards for loans extended to households in the third quarter.
He, however, added that the survey showed a “slight net easing” of lending standards for households in the third quarter, because of their increased tolerance for risk and borrowers’ improved profile.
The BSP’s quarterly survey consists of questions on loan officers’ perceptions relating to the overall credit standards of universal or commercial banks, as well as to factors affecting the supply of, and demand for, loans by both enterprises and households.
Latest data showed the outstanding loans of commercial banks increased by 14.1% to P4.67 trillion ($100.21 billion) in August, from P4.09 trillion ($87.77 billion) in the same month in 2014.
The BSP attributed the hike in bank lending in August to the rise in loans for production activities that account for more than 80% of banks’ aggregate loan portfolio.
Data showed loans for production activities went up by 13.8% to P4.16 trillion ($89.27 billion) in August, from P3.66 trillion ($78.54 billion) in the same month last year. – Rappler.com
$1 = P46.60
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