Last quarter consumer loans grew by 3.2% to P413B

MANILA, March 8 (PNA) -- Although the weather proved uncooperative in the final three months of 2009, consumer loans still managed to grow by 3.2 percent to P413.1 billion, according to the Bangko Sentral ng Pilipinas (BSP).

This was the period when tropical storms Ondoy and Pepeng hard hit Luzon, where the bulk of the country's output is produced.

Consumers turned their misfortune into opportunities for growth and gathered the courage to borrow from the banks a total P40.5 billion for personal and other household needs such as the purchase of appliances, furniture and fixtures or otherwise pay for taxes, hospital and educational bills.

As a result, other consumer loans went up by 10.4 percent during the period, the fastest growing consumer sub-sector loan tracked by the BSP on quarter-on-quarter basis.

Credit card receivables during the period, for instance, grew by only 4.9 percent to P136.6 billion while car loans grew by only 4.4 percent to P94.6 billion.

Residential real estate loans extended by both the large commercial and universal bank and thrift banks grew at a marginal rate of 0.1 percent to P162.6 billion, fortifying the BSP view against formation of asset price bubbles that require prompt adjustments in policy settings.

The BSP is set to recalibrate the rate at which it borrows from or lends to banks on March 11 and most analysts believe the rates will stay at four percent for borrowing and six percent for lending.

An upward rescaling of the rates will signal the start of the BSP’s much anticipated “exit program” when it begins to unwind all those regulatory and policy measures adopted earlier in support of continued economic growth.

That consumer activity remains manageable and prices as indicated by benign inflation rates and inflation expectations as of latest are strong arguments against a change in policy intent, based on previous statements issued by BSP governor Amando M. Tetangco Jr. and his deputy, Diwa C. Guinigundo.

At the economic briefing held at the Dusit Hotel in Makati recently, Guinigundo downplayed the likelihood of an increase in borrowing costs no matter the threat of a prolonged dry spell caused by the El Nino weather phenomenon.

Guinigundo said the combined impact of the dry spell and intermittent delivery of power for the various industries would be on the supply side of the growth equation over which policy rate adjustments did not have direct influence.

“Unless the BSP is convinced there are going to be second- or even third-round impact on prices and inflation expectations have been disanchored because of the El Nino and power outages, then monetary policy will respond accordingly,” Guinigundo said. (PNA)
RMA/Jun Vallecera/rsm