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By Maricel E. Burgonio Reporter
Bank lending is poised to improve
further with the industry’s stronger balance sheet, expansion of
the economy and low interest rates, BSP Governor Amando M. Tetangco
Jr., said.
The governor said bank
lending’s annual growth has generally steadied within 5 percent to
7 percent this year, particularly without reverse repurchase
purchase (RRP) placements with the Bangko Sentral ng Pilipinas.
“With the banks’ continued
asset clean-up, the current low-rate environment . . . and as the
economy continues to expand, we believe that bank lending will pick
up further,” Tetangco told reporters.
Banks outstanding loans posted a
moderate growth year on year as of end-July this year mainly driven
by higher loans granted to the Financial Institutions Real Estate
& Business Services (FIREBS) sector.
Outstanding loans of commercial
banks, thrift banks and rural banks, net of reverse repurchase or
RRP placements, expanded by 6.9 percent year on year in July
compared with the 4.7 percent growth posted in the previous month.
This was a substantial improvement from the 0.5 percent expansion
registered in the same month a year ago.
Gross of banks’ RRP placements
with the BSP, bank lending grew by 3.4 percent year on year in July
from 4.9 percent in June, as banks shifted their placements with the
BSP from RRPs to SDAs. This was lower than the 5.6 percent growth in
the same month last year.
“What is interesting, however,
is that this has coupled with corporates increasingly sourcing their
funding also from the equity and the bond markets,” Tetangco said.
Lending to all sectors of the
economy has expanded. The FIREBS sector grew only by 4.6 percent
during the period, net of RRP placements it posted the highest
growth at 21.1 percent.
Meanwhile, mining, manufacturing
and utilities sectors registered declines during the period.
In relation to oil price
movements, Tetangco commented that local pump prices will be
affected as well as inflation if international oil prices will be
prolonged.
“The movement in international
oil prices is one of the risk factors in our inflation forecast.
What would be a concern is volatility in the oil price level. If the
price remains as fairly as high levels for a prolonged period of
time such that it begins to affect local pump prices and inflation
expectations,” Tetangco said.
US crude was up 7 cents to $80.64
a barrel. The US Federal Reserve is expected to trim rates by at
least 25 basis points on Tuesday to prevent a credit squeeze from
pulling the economy into a recession, which analysts say would
dampen oil demand.
However, the Philippines is using
Dubai crude oil in benchmarking of local oil prices.
Inflation rate averages 2.6
percent in January to August this year, which is within the 4
percent to 5 percent inflation target.
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