MANILA - An auto dealers' group said Monday that strict bank requirements for auto loans are hurting their business as they try to recover from almost 3 months of lockdown.
The Philippine Automotive Dealers Association (PADA) said its members had no revenue during the enhanced community quarantine that shut showrooms.
Auto dealers that reopened are finding it more difficult to sell cars as banks have become stricter in assessing and approving auto loans, said PADA president Willy Tee Ten.
“We’d like to request sana that banks become more lenient when it comes to allowing buyers to loan from the banks,” Ten said in an interview with Teleradyo.
“Kung di nila pautangin yung buyer wala rin kaming benta,” he said.
(If they won’t give loans to buyers, we won’t be able to sell anything.)
Despite getting no revenue during the lockdown, auto dealers still needed to pay their rent, including accumulated interest on their dues, as well as the salaries of their employees. Ten said auto dealers also needed to pay banks for loans made to acquire their inventory, which they are now struggling to sell.
Ten estimated that the auto dealership industry directly employs around 35,000 workers.
In an interview last month, Ten said that his firm, Autohub Group of Companies, which sells brands such as Mini, Rolls Royce, Lotus, and Piaggio, had to lay off some workers because of the impact of the lockdown on the business.
BANGKO SENTRAL: NOT OUR CALL
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said that it couldn't force banks to loosen their requirements for loan approval.
Diokno said that while he understands the concerns of auto dealers, banks also need to make sure that their loans will get repaid by carefully screening applicants.
“Hindi namin pwedeng i-pwersa yung bangko, diskarte ng bangko yan,” Diokno said in another interview on Teleradyo.
(We can’t force banks, it’s their call.)
Diokno said the central bank implemented several measures to encourage banks to increase lending. He pointed to the 125 basis-point cut in the BSP’s key rate, as well as the 200 basis-point cut in banks’ reserve requirement.
Philippine banks have ample capital and are well-positioned to withstand possible shocks from the pandemic because of low bad loan ratios, he said.