The country’s banks remain strong and in the pink of financial health as lending activities continue to show efficiency, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said.
WITH THIS MUCH ADDITIONAL LIQUIDITY IN THE FINANCIAL SYSTEM, CONSUMPTION, AS WELL AS BORROWING AND LENDING ACTIVITIES ARE SEEN TO EXPAND FURTHER
“The continued strong credit activities demonstrate the effectiveness of Philippine banks in their role as intermediator of funds in the economy,” Diokno said at the European Chamber of Commerce luncheon meeting in Makati City on Tuesday.
“Banks remain sufficiently capitalized and past due ratios have also consistently declined over the years, contributing to greater ability to intermediate funds, manage risk and increase profitability,” he added.
According to him, this development supports the growing credit demand across different sectors.
Preliminary data from the BSP show even with the easing observed in bank lending and in domestic liquidity (M3), loan demand across across sectors remain healthy with manufacturing and real estate activities, among others, posting double-digit growth rates.
The BSP chief stressed that M3 levels continue to indicate the country sustaining its growth momentum given the latest liquidity-to-growth ratio of 64.2 percent in the first quarter.
In addition, Diokno cited the impact of the recent deposit reserve cuts that flooded the system with P180 to P200 billion worth of growth-inducing liquidity.
With this much additional liquidity in the financial system, consumption, as well as borrowing and lending activities are seen to expand further.
In all, the BSP chief said despite the challenges and economic headwinds ahead, the central bank will continue to deliver on its primary mandate of price stability.
“We assure you that the BSP shall remain steadfast in carrying out its mandate of promoting price stability, financial stability, and efficient payments and settlements system, to help the country achieve sustainable economic growth and provide a better quality of life for all Filipinos,” Diokno said. — Joshua Lao
Source: https://tribune.net.ph/index.php/2019/07/25/phl-banks-remain-strong/
