BSP-Banks' Loan Standards for Consumers Eased in Q4 2021.
ENPNewswire-January 28, 2022--BSP-Banks' Loan Standards for Consumers Eased in Q4 2021
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Release date- 27012022 - Results of the Q4 2021 Senior Bank Loan Officers' Survey (SLOS) showed that most of the respondent banks kept their overall credit standards generally unchanged for loans to both enterprises and households based on the modal approach.1 .
Meanwhile, the diffusion index (DI) approach2,3 showed a net tightening of general lending standards for loans to enterprises while a net easing of overall credit standards was reflected for loans to households.
ABOUT THE SURVEY
The BSP has been conducting the SLOS since 2009 to gain a better understanding of banks' lending behavior, which is an important indicator of the strength of credit activity in the country. The survey also helps the BSP assess the robustness of credit demand, prevailing conditions in asset markets, and the overall strength of bank lending as a transmission channel of monetary policy.4 The survey consists of questions on loan officers' perceptions relating to the overall credit standards of their respective banks, as well as to factors affecting the supply of and demand for loans to both enterprises and households.
The analysis of the results of the SLOS focuses on the quarter-on-quarter changes in the perception of respondent banks. Starting with the Q3 2018 survey round, the BSP expanded the coverage of the survey to include new foreign commercial banks and large thrift banks. Prior to Q3 2018, the survey covered only universal and commercial banks. During the Q4 2021 survey round, survey questions were sent to a total of 64 banks (42 universal and commercial banks and 22 thrift banks), 50 of whom sent in their responses, representing a response rate of 78.1 percent.
The responses for the Q4 2021 SLOS were collected between 29 November 2021 - 11 January 2022. It is important to note that data collection for the Q4 2021 survey round was implemented amid the government's extension of the COVID-19 alert level 2 measures in Metro Manila, a quarantine classification that allows more economic activity and has fewer restrictions.
DETAILS OF THE SURVEY RESULTS
Lending to Enterprises
The modal-based approach indicated that results for Q4 2021 showed that a high percentage of respondent banks (75.0 percent) pointed to generally unchanged overall credit standards for loans to enterprises. Meanwhile, the DI-based method reflected a net tightening of credit standards across all borrower firm sizes (particularly top corporations, large middle-market enterprises, small and medium enterprises, and micro enterprises). However, the diffusion indices...
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