Despite expectations of rising interest rates over the medium term, the cheap borrowing costs at present are set to encourage more Filipino companies and consumers to take out more loans in the fourth quarter of this year.
This was the key finding of a recent Bangko Sentral ng Pilipinas (BSP) survey conducted on senior officers of local banks which indicated that overall appetite for credit in the local financial system remained “stable” in the third quarter of 2017.
“A larger proportion of respondents expect overall demand for corporate and household loans to increase further in the next quarter relative to those who indicated the opposite,” BSP said in a statement on Friday, explaining that.
The monetary regulator said banks it surveyed cited expectations of higher working capital and accounts receivable financing needs of borrower firms as the key factors behind the expected increase in demand for business loans.
BUSINESS
BUSINESS
BUSINESS
“Meanwhile, the anticipated net increase in household loan demand was attributed by respondent banks to expectations of more attractive financing terms offered to clients and continued low interest rates along with higher household consumption,” the central bank said.
The survey showed that a majority of banks continued to see stable overall demand for loans from both enterprises and households. The same survey also revealed, however, that there was a net increase in loan demand across all firm sizes and all types of household loans, except personal or salary loans.
