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Vax rollout to hike bank lending

Republika

Increase in bank lending is seen amid the rollout of the coronavirus disease (Covid 19) vaccine program of the government which could pave the way for easing quarantine restrictions.


Further easing of quarantine restrictions is seen to boost bank lending since this will result in more active economic activities thus, a pick-up in loan demand, according to Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort.


“Any pick up in imports, manufacturing, and other business/economic activities would also lead to some pick up in loan demand,” Ricafort said.
The low interest rate environment, which is a result of the 200 basis points reduction in BSP’s key policy rates last year, is also projected to entice borrowers to take out loans, he said.


He added additional infrastructure spending by the government is also forecast to help lift bank lending since this has higher multiplier effects on the economy.

Photo by PNA


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