CITING lower real estate and auto loan rates, the Bangko Sentral ng Pilipinas (BSP) said banks have begun passing on to their lending business the monetary authorities’ cut in key interest rates.
“On the impact of policy rate easing by BSP, latest data show banks have passed on about 40 percent of the cut in policy rates in terms of lower bank lending,” BSP Governor Amando Tetangco Jr. said.
The BSP has reduced its policy rates by 175 basis points since December, bringing the overnight borrowing and lending rates to 4.25 percent and 6.25 percent, respectively.
Tetangco said banks could not pass on 100 percent of the rate cut, as the financial institutions are cautious due to the global financial crisis.
“This has been the experience not only of the Philippines but also in other countries. I have spoken with my counterparts with the other countries and they have confirmed that from their own experience, there is a less than 100 percent pass-through,” the governor said.
The BSP said local banks offer mortgage rates of 8.75 percent to 9.75 percent for the first year, 10.25 percent for the five-year tenor, and 10.75 percent to 11 percent for the 10-year.
“That is also the reason why we have tolerated a higher than normal growth in M3 [domestic liquidity] relative to economic growth and inflation,” Tetangco said.
Outstanding loans of commercial banks including placements with the BSP grew by 13.4 percent in April, slower than the 18.9 percent registered in March.
Domestic liquidity or M3 rose by 13.7 percent year-on-year, a slight deceleration from the 15.6 percent in March.
The BSP earlier said inflation is unlikely to accelerate despite increasing international oil prices due to the domestic economy’s slow recovery.
It forecast inflation to reach 3.4 percent this year, down from 9.3 percent last year.
Development Bank of Singapore had said the ongoing rise in oil and commodity prices could limit the scope for further rate cuts in the Philippines.
The Singaporean lender however said the BSP is likely to cut its policy rates by 25 basis points during the Monetary Board’s next meeting on July 9. –Maricel E. Burgonio, Senior Reporter, Manila Times
World Day for Safety and Health at Work
“Safety and health at work every day!”
Invoke Article 33 of the ILO constitution
against the military junta in Myanmar to carry out the 2021 ILO Commission of Inquiry recommendations against serious violations of Forced Labour and Freedom of Association protocols.
Accept National Unity Government
(NUG) of Myanmar.
Reject Military!
#WearMask #WashHands #Distancing #TakePicturesVideos
Monthly Observances:
March – Women’s Role in History Month
April – Month of Planet Earth
Weekly Observances:
Last Week of March: Protection and Gender Fair Treatment of the Girl Child Week
Last Week of April – World Immunization Week
Daily Observances:
Mar 25 – International Day of Remembrance of the Victims of Slavery and the Transallantic Slave Trade
Mar 27– Earth Hour
Apr 21 – Civil Service Day
Apr 22 – World Earth Day
Apr 28 – World Day for Safety and Health at Work
