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By Chino S. Leyco, Reporter
THE Bangko Sentral ng Pilipinas’ (BSP) series
of cuts in its overnight rates have finally made an impact on bank
lending based on latest figures that show borrowings hit the
double-digit territory by the end of the first quarter.
In a statement, the BSP said outstanding loans
of commercial, thrift and rural banks, net of overnight transactions
among them, grew 10.6 percent year-on-year in March, up from 5.7
percent in February.
BSP data showed total loans outstanding in March
stood at P1.851 trillion, up from P1.673 trillion in the same period
last year.
Loans for production purposes grew at a faster
rate of 15.7 percent, led by credits issued to the financial
intermediation, wholesale and retail trade, as well as the
electricity, gas and water sectors, all of which were among the
heaviest borrowers for the period.
However, manufacturers, as well as the real
estate and agriculture sectors, likewise heavy borrowers, cut their
credit exposures from a year ago.
Consumption loans rose 4.5 percent, driven by
credit card use. Auto and other loans, however, contracted
year-on-year.
The BSP continues to closely monitor
bank-lending activities to ensure that these are consistent with the
economy’s growth and the central bank’s inflation objectives.
Its overnight rates stand at 5 percent and 7
percent for the borrowing and lending windows, respectively.
BSP Governor Amando M. Tetangco Jr. earlier said
bank lending will sustain its growth this year despite high
inflation.
“When future price changes are well
anticipated, both users and providers of funds would be better able
to determine their requirements and risk appetites,” he said.
Besides traditional lending activity, he said
other means of raising funds would grow with the economy such as the
capital market.
Some analysts had said bank lending is expected
to decline this year due to slower growth as high prices will weaken
consumer spending, which drives economic expansion. Banks’
profitability will also be affected this year due to slower overall
growth and increased competition in the industry.
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