Businesses expect easier access to credit

MANILA, Philippines - Local businesses expect easier access to credit this quarter, according to a survey conducted by the Bangko Sentral ng Pilipinas (BSP).

According to the survey, the financial conditions index swung back to the positive territory at 1.3 percent in the first quarter from a -2.5 percent in the fourth quarter.

“This means that firms that expected better financial conditions outnumbered those that said otherwise during the quarter,” the BSP said.

“Firms were also of the view that their financing requirements could be met through available credit as more respondents continued to report easy access to credit compared to those that said otherwise,” it said.

The financial conditions of a firm take into account its general cash position, the level of cash and other cash items, and the repayment terms on its loans.

The access to credit, meanwhile, is the availability of credit from the banking industry and other financial institutions.

In January, the BSP’s Senior Loan Officers’ Survey showed banks expect to maintain their credit standards during the first quarter from the previous three months.

Banks in the fourth quarter tightened their credit standards for household borrowers while those for businesses were unchanged. For this quarter, respondent banks have said credit standards for households and firms should remain unchanged.

The survey also showed an expected increase for loan demand from corporate clients in the first quarter amid the firms’ higher inventory, working capital, and investment needs amid the rosy prospects of the economy.

Households were also expected to borrow more on attractive financing terms, higher consumption, and lower interest rates.