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BANGKO
Sentral ng Pilipinas Governor Amando Tetangco Jr. has
allayed fears the subprime mortgage loan debacle in the
United States would infect local lenders and lead to
tightening of credit.
Tetangco
said that in the universe of assets that Philippine
banks own at the moment—totaling P4.37 trillion—less
than a percent, or only 0.2 percent, equal to P8.73
billion, are invested in so-called structured
instruments known as collateralized debt obligations or
CDOs, which are similarly structured as the US subprime
mortgages.
Although
CDOs are also an important source of funding for
portfolio managers in the Philippines, “The banks are
not exposed significantly in any way [to them]. There
are only a few banks with small exposure in terms of
CDOs,” said Tetangco on Friday.
So while
the mortgage mess in the United States affected Europe
significantly, it could not happen in the
Philippines,
he said, adding that while there had been some effect,
it had come indirectly in the form of “investor risk
aversion” for instruments originating from emerging
markets like the Philippines.
“The
exchange rate is under some pressure and weaker again
[on Friday], much like currencies in the region except
the Japanese yen. Markets in the region are also
reassessing risks as this reappraisal continues,” said
Tetangco.
But he
has no doubt about seeing a “positive impact on our
markets” once the external (subprime) factor settles
down and markets refocus on fundamentals.
He
previously reported that bank lending grew by 5.1
percent in June versus only 1.3 percent a year ago. “On
a month-on-month basis, seasonally adjusted lending data
posted a growth of 1 percent, a reversal of the
7.6-percent contraction registered a month ago.”
Bank
lending to all sectors of the economy, except
manufacturing and mining, posted expansions during the
period.
The
financial institutions, real-estate and business
services sector grew by 6.5 percent year-on-year in June
from a 13.7-percent growth in the previous month.
Loans to
the community, social and personal services sector, the
wholesale and retail trade sector, and the construction
sector grew by 13.2 percent, 4.7 percent and 8.7
percent, respectively.
Lending
to the agriculture, fisheries and forestry sector rose
by 7.4 percent, while lending to the transportation,
storage and communication sector increased by 12.3
percent, and 1.6 percent in the utilities sector.
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