RP businessmen have more access to credit - survey

Filipino business leaders remain optimistic, with most of them saying they have good access to money in order to bankroll their operations and that lenders here are more supportive than the global average, an international study showed.

A Grant Thornton International Business Report (IBR) released by Punongbayan & Araullo ranked the Philippines as one of five economies where privately held businesses (PHBs) are most optimistic about their accessibility to finance.

In fact, only 33 percent of them believe that they will have less or much less access to finance in 2009.

“The trend we’re seeing in this year’s IBR is that Filipino business leaders in general are being cautiously optimistic,” said Greg Navarro, P&A’s managing partner and CEO. “While the global picture is looking bleak, the situation here in our own backyard is far from dire, and local PHBs are taking their cue from that.”

IBR 2009 results also showed that 73 percent of Filipino business leaders feel that their lenders are supportive or very supportive of their business. There are indications, however, that some financial institutions strictly screen requests for additional credit from existing clients. Companies with new projects that need financing or new entities that are seeking loans have to go through the proverbial eye of the needle to obtain additional or new credit.

A report from the Bangko Sentral ng Pilipinas (BSP) shows that bank lending continued to grow at a healthy pace in November 2008. Outstanding loans of commercial banks totalled P1.93 trillion in November, compared to P1.6 trillion in November 2007. Bank loans for personal consumption amounted to P163.73 billion, posting a year-on-year growth of 20.6 percent.

 “It’s important that lenders resist the urge to be overly protective of their bottom lines so that entrepreneurs don’t miss out on opportunities to expand or strengthen their businesses,” Navarro said, adding “there are many projects that are diamonds in the rough – very promising and lucrative in the long run.”

For example, the real estate industry received a big boost from creditors as total real estate exposure of thrift banks at the end of the third quarter of 2008 was recorded at P97.6 billion. This is P16.2 billion better than the same period in 2007. “We should see positive developments here by the third or fourth quarter of 2009, but developers need the continuous support from financiers to weather the slump,” Navarro explained.

Other countries that remain optimistic are Malaysia, Canada, South Africa, Denmark, Poland, Taiwan, Botswana, India and Australia.

Singapore and HongKong on the other hand say that although financing is more accessible to them compared to others, lenders are less supportive. On the other hand, Thailand PHBs say that they have less access to finance and lenders are not supportive.

Overall, 61 percent of PHBs globally expect finance to be less or much less accessible in 2009 while 69 percent of them feel their lender is currently being supportive or very supportive towards their business – even in such difficult times.