• Bank credit standards steady in first quarter


    The Bangko Sentral ng Pilipinas (BSP) on Monday announced that banks maintained their credit standards for loans to both enterprises and households during the first quarter of the year.

    Citing the results of the First Quarter 2013 Senior Bank Loan Officers’ Survey, the BSP said that overall credit standards were “generally steady during the quarter.”

    “Most banks indicated generally unchanged bank credit standards for the 16th consecutive quarter starting second quarter 2009, based on the percentage of responding banks indicating whether they tightened, loosened, or maintained their credit standards,” it stated.

    The central bank added that most banks continue to indicate generally unchanged credit standards for enterprises.

    Using the diffusion index (DI) approach, the survey said that a minimal net easing of overall credit standards for loans to enterprises was noted with a DI of -9.7 percent.

    “However, a few banks eased their credit standards for enterprises, citing an improved profile of borrowers and profitability of banks’ asset portfolio, a more favorable outlook on the domestic economy, and an increased deposit base of banks as important factors that contributed to the easing,” it said.

    In terms of borrower firm size, the percentage of respondent banks that reported easing credit standards for top corporations and large middle-market enterprises remained low at -15.4 percent and -14.8 percent, respectively. Overall credit standards for small and medium enterprises (SMEs) also showed a slight net easing after being unchanged in the previous quarter at -14.3 percent.

    Credit standards for micro enterprises continued to show a slight net tightening at 11.1 percent.

    The BSP also said that over the next quarter, most of the respondent banks expected credit standards for loans to enterprises to remain unchanged.

    “However, the percentage of banks foreseeing a slight easing of credit standards for loans across all firm sizes was higher compared to those expecting otherwise,” it added.

    The central bank noted that the responding banks cited expectations of an improvement in the profitability and liquidity of banks’ asset portfolio as factors behind the potential easing of standards. On the other hand, the BSP reported that unchanged credit standards for loans extended to households were noted at -4.2 percent.

    However, it explained that some banks indicated a slight easing of credit standards for household loans in the first quarter of 2013 for the third consecutive quarter, on the back of improved profitability of banks’ asset portfolios, more aggressive competition from banks and nonbank lenders, increased tolerance for risk and improved profile of borrowers.

    Mayvelin U. Caraballo


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