Despite expectations of rising interest rates over the medium term, the cheap borrowing costs at present are seen 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 survey covering senior officers of local banks that indicated that the overall appetite for credit in the 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,” the BSP said in a statement yesterday.
The monetary regulator said the banks it surveyed had cited expectations of higher working capital and accounts receivable financing needs of borrower firms as the key factors behind the projected increase in demand for business loans.
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“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 BSP 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.
