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ALTHOUGH
key banking personalities have loudly protested against
industry members being called “lazy,” data from the
Bangko Sentral ng Pilipinas (BSP) show there is some
basis for that because they continue to make money not
from lending to people or businesses, but from lending
to the central bank.
It was
monetary board member Romulo Neri, also the National
Economic and Development Authority (Neda) chief, who
first revealed the private banks’ penchant for making
money the easy way, which the banks promptly denied.
BSP data
show the banks’ total loan portfolio shrank about 4
percent, to P2.007 trillion in May from P2.091 trillion
the previous April, at a time when bank lending was
supposed to have accelerated in March and was being
touted by the administration as a mark of a renewed
active-investment climate.
On
Monday, the BSP said decline in lending was faster than
the drop in all the banks’ combined non-performing
loans, averaging 2.9 percent.
“The
decline in bank lending was largely due to the lower
volume of reverse-repurchase transactions as several
universal banks and regular commercial banks placed more
funds in special deposit accounts (SDAs) of the BSP,”
bank governor Amando Tetangco Jr. said in a statement.
There is
nothing wrong with banks making more money out of the
special deposit facility of the central bank, which, in
fact, yields more returns for the purely commercial
motives of the industry than they can find anywhere at
the moment.
But
officials said denials by the banks of the Neri label,
which can also be interpreted as saying they have busy
lending, is clearly belied by all the numbers proving
Neri was correct from the very beginning.
SDAs pay
the banks 6.5 percent for bringing in funds under the
special facility, far more than they can earn from, say,
government securities issues like the 91-day, 182-day or
even the 365-day Treasury bills issued regularly by the
Bureau of Treasury.
More
recent regulatory refinements have also made it easier
for banks to tap the SDA facility, the tiered
interest-rate scheme having been abandoned to signal the
monetary board’s view that existing policy settings
remain consistent with price stability projections 18 to
24 months down the line.
The BSP
said the banks’ nonperforming loans marginally increased
to 5.33 percent of portfolio in May from 5.27 percent in
April, an improvement from NPLs averaging 7.57 percent a
year earlier. |
