Banks’ lending standards unchanged in Q1
In San Juan, Batangas, ‘Barako 77’ drives environmentalism beyond the book
The banking sector maintained their credit standards for loans to businesses and consumers in the first quarter this year due to unchanged market conditions and steady loan demand, according to a survey by the Bangko Sentral ng Pilipinas (BSP).
The latest quarterly BSP Senior Bank Loan Officers’ Survey (SLOS) was conducted between Feb. 28 to April 8. Basically, the SLOS is a set of questions asked of loan officers to get their opinion on the overall credit standards and loan demand.
The SLOS, which uses two methods to review the results, showed that most banks have retained their overall lending standards using the modal approach. The other method, which is the diffusion index (DI), indicated a net tightening of loan standards for businesses and an unchanged credit standards for loans to households.
The BSP said Friday, April 26, that 86.3 percent of the 53 surveyed banks retained their lending standards for loans to enterprises based on the modal approach.
The DI method indicated a net tightening of credit standards across all borrower company sizes “due to a deterioration of borrowers' profiles and profitability of bank portfolios and banks’ lower risk tolerance.”
The survey includes the outlook for the next quarter, which is the second quarter, and based on the modal approach, there was a steady lending trend for enterprises. As for the DI method, this “pointed to expectations of tightening loan standards given the deterioration in the profitability and liquidity of banks’ portfolios and borrowers' profiles.”
Commercial real estate loans (CRELS) under the business loans showed that about 88.9 percent of surveyed banks in the first quarter said they did not change the credit standards for CRELS.
Using the DI results, this however indicated a net tightening of credit standards for CRELS largely due to banks’ reduced tolerance for risk, and a deterioration in borrowers' profiles and profitability of banks' portfolios, said the BSP. “Over the following quarter, a larger percentage of bank participants anticipate to retain their lending standards for CRELS based on the modal approach, while the Di-based method pointed to expectations of net tightening loan standards,” the BSP also said. As for the lending standards for loans to households, the central bank said that for the first quarter, both the modal and DI methods showed that most banks maintained lending standards to household loans because of banks’ unchanged risk tolerance, steady profitability of banks’ asset portfolios, as well as stable economic outlook and profile of borrowers. Based on the modal results, for the next quarter or the second quarter, the BSP sees a higher number of banks that are “anticipating” steady loan standards for households. As to the DI approach, this indicated a net tightening of credit standards largely due to banks’ expectations of a deterioration in the profitability of their portfolios and on borrowers' profiles as well as banks’ reduced tolerance for risk, said the BSP.
Banks’ housing loans also have unchanged credit standards during the first quarter. The SLOS indicated that 75 percent of banks maintained credit standards for housing loans. Using the DI method, this indicated unchanged housing loans standards due to banks' steady risk tolerance and stable economic outlook.
The BSP said 70.6 percent of surveyed banks said they have a steady overall loan demand from enterprises based on the modal method. But based on the DI approach, there was a “net increase in loan demand from across all firm classifications driven by banks' more attractive financing terms, bank customers’ lack of alternative sources of funds, and improvement in clients' economic expectations, among others.”
For the second quarter, the BSP said most of the surveyed banks “anticipate broadly steady business loan demand” while the DI method expects a net increase in credit demand from businesses because “firms finance their accounts receivable and operational requirements, such as increasing inventory levels to meet expected demand amid a more optimistic economic outlook.”
Loan demand for CRELS based on the modal approach was generally unchanged in the first quarter and it is expected to remain steady in the second quarter. The BSP said the Di-based results showed a net increase in CREL demand for the first and second quarters due to the “higher customer inventory and accounts receivable financing needs, improvement in customers’ economic outlook, among other factors.”
Loan demand for households, meanwhile, has also remained steady. About 68.6 percent of surveyed banks said credit standards were steady in the first quarter while the DI method showed a net increase in demand from all key household loan categories driven by increasing household consumption and banks’ more attractive financing terms, said the BSP.
For the second quarter, banks expect steady loan demand from households as well.
San Juan started as a small village and eventually gained recognition as a first-class municipality in 2005. While the town is well-known for its coastal gems, ancestral houses, and festivities behind the Lambayok trio, it once faced what could’ve plagued its rich biodiversity.
Ciara Marasigan-serumgard helped chronicle San Juan’s history and published a book entitled “Barako 77: The Story of Environmental Activism in San Juan, Batangas.” It remains relevant and inspiring now more than ever when the lands we strive to conserve face threats.
The story lives on
The book tells the story of her grandfather, Horacio Marasigan Sr., and the San Juan community opposing the construction of a copper smelter plant in the 1970s, which birthed the grassroots movement Concerned Citizens of San Juan.
“With the book as a reference, we are proud to have successfully lobbied for an ordinance proclaiming every Oct. 22 as
Araw ng Pagkakaisa para sa Kalikasan ng Bayan ng San Juan (Day of Unity for Nature in San Juan Town),” said Farrah Rodriguez, executive director of Barako Publishing.
The ordinance marked the occasion when nine out of 10 San Juaneño residents sparked a peaceful environmental movement and withstood the copper smelter and fertilizer complex in a Diocesan poll.
If built five decades ago, the project would’ve jeopardized the Verde Island Passage, later recognized as the “center of the center” of marine shorefish biodiversity — proving that our environment was and still is worth defending.
Women's passion in action
Serumgard involved a village of historians, researchers, writers, and illustrators in creating the book, which was launched under women-driven Barako Publishing on April 22, 2024 during Earth Day.
“We redefine the term ‘barako’ as a man or woman empowered by education. I took over the academic journal and grew it into the legacy history book it is today, and envisioned it for wider readership when I founded women-led Barako Publishing in 2023,” she said.
The book, which took a decade to plan, contains five main chapters, several short essays, and numerous photographs and illustrations highlighting San Juan's history, social realities, and opposition to the copper smelter.
“‘Barako 77’ was written with three audiences in mind: San Juaneños who are unfamiliar with their history and heritage, researchers of economic and environmental history, and the general reader who wishes to know the history of our country,” said co-editor Katherine Lacson.
People who don’t know history, choose to ignore it, or inadvertently forget it, walk sightlessly on the path in front of them, stumbling over the same hurdles their ancestors faced. But historical materials like “Barako 77” serve as our map, allowing us to see the present better through the past.
Reading about history may not be interesting to some, but it interests the very lives of those threatened, including our biodiversity. The story of “Barako 77” shows that there is power in collective action, helping prove that women with shared principles can conquer even the biggest threats.
Reading about history may not be interesting to some, but it interests the very lives of those threatened, including our natural resources.