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By Maricel E. Burgonio, Reporter
The Bangko Sentral ng Pilipinas (BSP) said consumer lending and
fee-based income could support banks loan growth this year.
BSP Governor Amando Tetangco Jr.
said banks have sustainable source of income besides interest
income, such as fees from trust operations and remittance services,
as well as consumer lending.
“Even if their income from bank
lending will not grow at the same rate as last year, that can be
explained also in terms of the fact that not all are dependent on
bank lending,” Tetangco said.
Outstanding loans of commercial
banks, thrift banks and rural banks, excluding reverse repurchase or
RRPs, expanded by 7.8 percent year-on-year in December last year.
Bank lending to all sectors of the economy, except for agriculture,
fisheries, and forestry and manufacturing, increased in December.
For the first quarter,
outstanding loans of commercial banks, including reverse repurchase
agreements or RRPs rose 10.6 percent year-on-year.
As agriculture and services
lending are not growing significantly, Tetangco said, banks are
boosting its consumer-lending business such as housing, auto and
salary loans.
Bank lending is vital to an
expanding economy because it finances investments that promote
economic activity
Besides banks, the sectors can
also raise their fund in the capital market.
Tetangco also noted that some
banks are not dependent on trading income.
Fitch Ratings Inc. earlier said
high bank-lending growth in the Philippines is unlikely to be
sustained due to challenging operating environment and lack of
sustainable earning assets of banks.
In a special report on the
Philippine banking system, Fitch noted the weak demand for bank
credit in the last two years, which is equivalent to 33 percent of
gross domestic product.
The credit ratings firm said the
expansion of the Philippine economy is driven by services and
agriculture, which require less bank credit.
Based on central bank’s latest
report, Philippine banks are expected post double-digit lending
growth this year driven by lower bad assets and increased demand for
consumer and infrastructure development.
Nestor Espenilla Jr., BSP deputy
governor, earlier said credit growth could reach 10 percent and
non-performing loans ratio could decline further below 4 percent by
the end of the year.
Fitch said banking system is also
depending on trading income in terms of allocation of investments.
About 25 percent of the banking
system assets are allocated mostly in government debt securities. 
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