GMA exhorts bankers to lower lending rates

President Arroyo made a special post-Valentine pitch yesterday to local bankers to have a heart and lower their lending rates to spur greater economic activity in the country and as a reciprocal gesture to her administration whose economic policies have made banks profitable.

The President made this appeal in a prepared statement she read at the start of her weekly press conference at Malacañang yesterday following the news that the Bangko Sentral ng Pilipinas (BSP) had cut interest rates to a six-and-a-half year low.

Appearing in a red dress in her press conference yesterday, President Arroyo greeted her audience "Happy Valentines and I hope the bankers will love those who need to borrow from them."

"I want to call on our banks all over the country to add some more help to our government to strengthen our economy," Mrs. Arroyo appealed.

The President pointed out that the BSP’s moves in bringing down interest rates of government-issued Treasury bills and key interest rates like the overnight rates and reserve requirements of banks will "ease the flow of money in the financial system" of the country.

She said the BSP moves will benefit anew the largest commercial banks and biggest universal banks in the country. "That’s why I hope they (bank owners) will repay this by lowering their lending rates to corporate and retail borrowers," President Arroyo said.

The President cited the slowing average inflation rate of 3.8 percent last January which reflected the stability of prices of prime commodities in the country.

"But still, there are some commercial and universal banks in the country that have not responded to this (development)," she rued.

President Arroyo cited that interest rates have, in fact, been the lowest for the last 13 years and this was achieved during the first year of heradministration.

"It is saddening that some banks have not complied with the "gentleman’s agreement" with the BSP and the Bankers Association of the Philippines," the President deplored.

She pointed out a number of companies and businessmen in the country who have "high debt exposure" and interest expenses need the assistance to trim their debts and strengthen their business.

"The competitiveness of the Philippines in the world is in danger if the interest rates of banks will not go down," the President warned.

Mrs. Arroyo expressed the hopes that private banks would follow the leads taken by goverment institutions like the Development Bank of the Philippines and the Land Bank of the Philippines in bringing down their lending rates.