Bank lending to small and large businesses have exceeded P96 billion as of late July after the Bangko Sentral ng Pilipinas (BSP) relaxed reserve requirement rules for lenders.
In a statement on Tuesday, the central bank said it saw “an increase in the amount of bank loans extended to micro, small and medium enterprises (MSMEs), as well as [to] large enterprises that are booked in compliance with their reserve requirements, following BSP’s relief measures to ease the impact of the Covid-19 (coronavirus disease 2019) pandemic.”
Citing preliminary data, the Bangko Sentral reported that 97 banks extended loans to MSMEs as an alternative mode of compliance with their reserve requirements with an average daily balance of P84.2 billion as of the reserve week ending July 23.
The amount was a 750.5-percent increase from the P9.9 billion average daily balance used by 55 banks after the relief measures for them took effect during the reserve week ending April 30.
Meanwhile, 13 banks provided loans to large enterprises with an average daily loan balance of P12.3 billion.
This figure was much higher than the P376 million used by 12 banks during the reserve week ending June 4, when the relief measures for them took effect.
“This indicates that banks have continued to grant new loans or refinance existing ones to MSMEs and large enterprises, even through the quarantine. We see this contributing positively to whole-of-nation efforts to mitigate the economic impact of the health crisis,’ BSP Governor Benjamin Diokno said.
The statement comes after the Bangko Sentral’s policymaking Monetary Board adopted in April a policy recognizing new loans granted to MSMEs as a form of alternative compliance with reserve requirements effective April 24, 2020 until Dec. 30, 2021.
It later amended this policy the next month to allow lenders to count their loans to large enterprises as part of those requirements.