Land Bank to grow corporate lending

Land Bank to grow corporate lending

Monday, 27 December 2010 00:00
 
STATE-RUN Land Bank of the Philippines is bullish that it could sustain a double-digit growth in corporate lending next year as companies would continue to take advantage of the low interest rate environment. Cecille Borromeo, Land Bank treasurer, told reporters that domestic banks have sufficient resources to address increased demand for corporate capital as firms are projected to be on an expansionary mode to keep up with the growing economy.

“Corporate banking should go up 13 percent next year,” Borromeo said.

She said Land Bank, like most other lenders, have already established a credit line that the corporate sector can tap. These lines can be approved within 24 hours, provided the companies have complied with all the requirements and documentation.

Among those that show a high level of interest to borrow capital from banks are firms in manufacturing, trading, real estate and services, particularly in food, hotels and transport sectors.

Borromeo said companies that have substantial credit lines with Land Bank include conglomerates like San Miguel Corp., the Ayala Group, Metro Pacific Investments Corp. and Filinvest Land Inc.

The executive said that Land Bank has earmarked P110 billion for corporate lending this year. At end-November, the lender is already close to hitting the target.

“We hope there would be more borrowers next year. Banks are very liquid and those funds need to be deployed,” Borromeo said.

The Bangko Sentral ng Pilipinas (BSP) has kept its overnight borrowing or reverse repurchase rate at a record-low of 4 percent and the overnight lending or repurchase rate at 6 percent.

The rates have been steady since July 2009 after the BSP cut a total of 200 basis points from December 2008 to July last year to boost lending activity and stimulate the economy during the US-led global financial crisis.

Borromeo said companies are turning to banks for loans to finance their expansion plans, as well as other capitalization requirements because of stable and low interest rates.
KATRINA MENNEN A. VALDEZ

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