Philippine banks can lend more to businesses

With banks’ accumulated resources rising to P6.9 trlllion in February, lending by banks to consumer and corporate borrowers is expected to increase, according to a Bangko Sentral report.

Data from the central bank showed that the banking sector’s resources went up by 8.1 per cent from P6.5 trillion in the same period the previous year.

The growth in banking resources was triggered by rising deposits from households and corporate entities aid growing income levels, which is indicative of the public’s continued trust in the banking sector.

According to the BSP, this trend will bolster consumption and investment activities, fueling the country’s overall economic growth.

Credit expansion is estimated to reach close to 10 per cent this year, the report added.

The growth of banking resources was achieved despite the decline in number of banking institutions operating in the country – from 785 as of end December 2009 to 758, as reported in the same period in 2010.

Central Bank officials said that key indicators show the country’s banking sector remains sound and stable.

Adapted from “Resources of banks hit P6.9 T in Feb,” Philippine Daily Inquirer, page B6, May 17, 2011