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BANK lending will sustain its growth this year despite the recent
hike in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates,
the central bank said.
BSP Deputy Governor Diwa C. Guinigundo told
reporters the recent increase in the central bank’s key policy
rates will not reduce economic activity.
“Given that the demand indicators are buoyant,
they can withstand an increase in interest rates,” he said, adding
the demand for credit from different economic sectors is expected to
increase continuously.
“It’s not going to be a disincentive for
demand to continue going up but it’s not going to add additional
pressure on inflation, or reduce economic activity,” he added.
Based on its latest report, the BSP said
outstanding loans of commercial banks grew 10.6 percent year on year
in March. This was nearly double the 5.7 percent rise posted in
February. Excluding inter-bank transactions, lending increased by
15.7 percent year on year in March.
“It is only now that credit is beginning to
pick up,” Guinigundo said.
Loans for production purposes grew by 15.7
percent in March, while consumption loans rose by 4.5 percent.
Production loans were driven largely by credit extended to the
financial intermediation and electricity, gas and water sectors.
Meanwhile, the growth in consumption loans was dominated by the
expansion in credit card receivables.
BSP’s key policy rates increased to 5.25
percent for the overnight borrowing facility and 7.25 percent for
overnight lending window effective last Thursday. The BSP last
increased its rates in October 2005.
-- Maricel E. Burgonio
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