MANILA - Micro, small and medium enterprises have benefitted from low interest rates as the Bangko Sentral ng Pilipinas ensured that there is ample liquidity in the market, a central bank official said Thursday.
More MSMEs were able to borrow with about P180 billion loans based on BSP data, BSP's Department of Economic Research Managing Director Zeno Abenoja said in a press briefing.
The BSP earlier cut the reserve requirements for banks and kept its key interest rate at a record low of 2 percent.
"Looking at the data since the start of this initiative we can see that for MSMEs, they have benefited in terms of about P180 billion in loans that were granted under this compliance measure. The large enterprises have also benefitted but in fact to a lower extent, more than P30B," Abenoja said.
BSP Governor Benjamin Diokno earlier said by keeping interest rates low banks could extend aid to consumers and MSMEs during the pandemic.
As of June 3, 2021, the BSP has injected P2.2 trillion in liquidity into the financial system through record low interest rates, reductions in bank reserve requirement ratios, advances to the National Government, and purchases of government securities in the secondary market.
Despite the low interest, Diokno said "bank lending has remained weak due to bank risk aversion and uncertainty."
Lending contracted 5 percent in April, data showed.
The government's vaccine rollout, as well as the fiscal and monetary support, are crucial in "providing direct support to revive domestic demand and prevent long-term economic scarring from the pandemic, with the BSP remaining ready to implement further policy measures if necessary.”
The BSP said keeping these policies in place could speed up recovery.
Diokno also reiterated that the central bank is ready in case of any policy decisions by the US Federal Reserve. The Fed, however, is unlikely to take action anytime soon since there is a mid-term election in the US in 2022, Diokno said.