By LEE C. CHIPONGIAN
February 5, 2012, 11:35pm
MANILA, Philippines — The central bank reported over the weekend that
banks' credit standards last year remained unchanged and there was no
tightening of credit standards for loans to both households and
enterprises, indicating the industry's steady outlook on the economy
despite a lower-than-expected 2011 gross domestic product (GDP) growth.
Based on its fourth quarter Senior Bank Loan Officers' Survey, the
Bangko Sentral ng Pilipinas (BSP) concluded that overall lending
standards remained stable in the last three months of 2011. This
sentiment is supported by banks' continued optimism about the economy,
their stable asset portfolio and their tolerance for risk.
The survey, which is conducted quarterly to help the BSP assess the
effectiveness of bank lending as a transmission channel of monetary
policy, also noted that there is increase in loan demand for loans from
enterprises and households, with the exception of micro-enterprises and
automotive loans.
The BSP said banks attributed the increase to customers' inventory and
accounts receivable financing needs, the low interest environment, the
attractive terms of financing offered by banks and for housing loans,
the higher housing investments that were seen during the period.
Based on the survey, banks did not change their lending standards for
loans to enterprises in the last quarter of 2011, and this "reflected
the banks' steady outlook on the general economy and certain industries
amid more uncertain global economic prospects, stable asset portfolio,
and unchanged tolerance for risk," said the BSP.
With regard to firm size, the BSP said the results of the survey showed
mixed results as credit standards for top corporations and micro
enterprises indicated a slight net tightening while banks' responses
showed a slight net easing in standards for large middle-market firms
and small and medium-sized enterprises. BSP also noted that banks'
standards on collateral requirements were unchanged since the third
quarter of 2011 while loan maturities have been lengthened.
"Moving forward, banks expect a slight net tightening over the next
quarter of overall credit standards, particularly for top corporations
and large middle-market enterprises. This was confirmed by some banks
already indicating somewhat tightening of credit standards for top
corporations and micro enterprises in the fourth quarter," said the BSP.
As for lending to households, the central bank said the credit standards
to all types of household loans were unchanged in the fourth quarter
after an overall net easing in the previous last two quarters.
There were also noted unchanged standards on collateral requirements,
loan covenants, and loan maturities across all types of household loans.
"Over the next quarter, banks indicated that credit standards would
likely remain unchanged for credit card and auto loans while those for
housing and personal/salary loans would likely ease somewhat in the near
term," said the BSP.
The survey forms were sent to 34 commercial banks but only 24 responded
or a response rate of 70.6 percent. The BSP started the bank loans'
survey in 2009 to "enhance its understanding of banks' lending behavior,
which is an important indicator of the strength of domestic economic
activity."
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