SDAs decline, lending up – BSP

BSP to banks: Relax on stringent borrowing requirements

DAVAO CITY – An executive of the Bangko Sentral ng Pilipinas (BSP) said that money placed on its special deposit accounts (SDA) facility has declined on recent months while money allocated by the banks to lending has inversely climbed up.

Rosabel B. Guerrero, acting deputy director of the BSP's department of economic statistics, did not give figures however. But she said that this new trend was due to the revisions the BSP made on the availment of the facility following its displeasure over the propensity of the banks to park their money at the high-yielding SDA facility than to lend.

“There has been a decline in the SDA and at the same time we are seeing a growth, albeit, small, in the lending by the banks,” she told an economic briefing here on December 17 at the Marco Polo Hotel.

“I am appealing again to the banks to please relax on their stringent requirements now because many of the borrowers have already passed the requirements,” she said.

Finance Underscretary Gil Beltran said conduit banks and outlets of their microfinancing have reported that they have lent P700 million so far to seven million borrowers. He suggested that borrowers who seek less stringent banking requirements should go to the other outlets such as cooperatives.

“We are seeing a robust increase in microlending,” said Beltran, who also guested in the economic briefing.

Throughout most of last year and this year, the BSP has expressed misgivings that the banks preferred to deposit their excess liquidity under the high-yielding SDA facility than to lend under what the banks described as a risky investment.

The BSP has ascribed the robust performance of the banking sector this year to the profitability of their money under the SDA and not derived from the yields on the borrowings to households and businesses.