Banks are selective in loans

Banks are likely to be more selective when they lend to businesses, but also more liberal when they lend to households in the third quarter, while demand for credit remains strong, said the central bank this weekend. For Bangko Sentral ng Pilipinas, his latest survey of senior lenders at local banks revealed a "net tightening" of credit standards for corporate borrowers, using the diffusion index method used to evaluate data.

. because of banks' perception of stricter regulation of the financial system and expectations of a decline in the bank's deposit base and the deterioration in the profile of their corporate borrowers, "said the BSP in a statement

. households, however, the bank agents surveyed by the BSP, results based on the diffusion index have underlined the expectations of a slight net easing of credit standards for loans As BSP said that for the third quarter of 2018, a greater proportion of respondents expect the aggregate demand for business and household loans to increase compared to those who have 19659002] "The banks surveyed cited higher investment expectations in factories or equipment and the increased need for working capital as factories. Key Reasons for the Expected Increase in Demand for Business Loans "

. The banks surveyed attributed the demand for loans to households at low interest rates and higher household consumption.

The BSP survey also revealed that loans to the real estate sector – one of the most active users of credit – would remain robust. "The results based on modal and diffusion index approaches also showed that banks surveyed predict" Most banks have reported an unchanged demand for housing loans in the second year. quarter, but pointed to a net increase in the demand for housing loans, "he added. "The banks' responses also indicated expectations of sustained strong demand growth for real estate loans in the third quarter."

The BSP survey is similar to those conducted by other central banks such as the US Federal Reserve, the European Central Bank and the Bank. of England, the Bank of Canada and the Bank of Japan. Thirty-five of the 43 universal and commercial banks as of June 2018 are currently included in the survey.

At the end of May 2018, the loans of these large banks accounted for about 88.6% of the gross total of the banking system.

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