BSP: Lending activities to hit double-digit growth in 2nd sem

CEBU, Philippines – The Bangko Sentral ng Pilipinas (BSP) expects lending activities to perk up and hit double-digit growth in the second half of the year and help further boost the economy in the said period.

BSP Governor Amado Tetangco Jr. said in a report that the borrowing activities of corporate and household borrowers could increase from single digit levels since June last year.

In an interview, Planters Development Bank (Plantersbank) SBG (SME business group) Visayas lending department head Sim dela Cruz said borrowing at the bank has increased since after the May presidential elections.

"We are slowly recovering this year. Last year was a very bad year for us," he said in an interview.

Peninsula Rural Bank Inc. president Robert Cantoy, earlier said lending activities of the bank has also been increasing in the rural bank. This is one of the reasons why the banking arm of the RD group of companies has applied with the BSP to upgrade into a thrift bank to be able to offer more banking products and services to the market.

Meanwhile, the report said that while consumer loans in the form of credit card purchases, auto as well as personal loans have grown above 10 percent since December 2009, production-related loans obtained by the corporate sector did not perform as much because of the global financial crunch.

Consumer loan growth rates accelerated from less than five percent in March this year to 6.4 percent in April, 7.9 percent in May and finally to 9.3 percent in June.

Tetangco said it is possible for bank loans to post double-digit growth in the second half of the year considering the country's strong economic performance, which ac-celerated to 7.9 percent in terms of the gross domestic product in the second quarter from 7.8 percent in the first quarter.

Aside from banks, borrowers are also tapping other financing institutions and other sources of funding such as the debt and equities markets which are becoming more and more reliable alternative financing sources.

Tetangco said the increased debt and equities markets activities indicates a liquid market, which means that players freely move in and out of the market, alternately buying and selling financial instruments at will. (FREEMAN)