The Bangko Sentral ng Pilipinas (BSP) said the banking sector’s credit standards remained more or less the same in the last 12 months as they closely monitor any changes in credit and bank lending activities.

However they noted some slight tightening of credit standards for loans availed by small and medium enterprises (SMEs) and micro-enterprises. Still, banks became more lenient in their lending to households, and eased up on the collateral requirements of personal loans, as well as implementing lower margins for automotive loans.

BSP also noted that the funding needs of enterprises and households have increased since the 2008 financial crisis.

In the current survey, banks cited low interest rates, attractive terms of financing, and increased cash flow projections of borrowers as the factors behind the increase in net demand for loans for both enterprises and households. Commercial banks loans account for around 86 percent of the banking system’s total outstanding loans.

The BSP last year formally launched its first senior bank loan officers survey to keep an eye on credit standards and if these were being tightened, which would contribute to a credit squeeze.

The report is being released now with comparable findings a year later.

In a statement, BSP said the results of the survey indicated that banks have generally maintained steady credit standards for loans to enterprises since the second quarter of 2009.

“Most respondents have been reporting basically unchanged credit standards since the second quarter 2009 after reporting some tightening in first quarter in the immediate aftermath of the peak of the global financial crisis,” said the BSP. It noted that trend is also “consistent with the sustained growth in bank lending to productive sectors in the last five quarters.”

In the latest survey which was up to the end of March this year, BSP noted a net tightening of credit standards which has generally been declining since June last year.

“This implies that the series of policy rate reductions by the BSP was not diluted as credit standards were broadly steady,” said officials.

Insofar as lending to enterprises is concerned, increased competition among banks was the major factor cited by respondents as the reason for the reduced net tightening of credit standards, said the report.

“Risks related to expectations about economic activity made a relatively smaller contribution to the net tightening of credit standards to loans to enterprises compared to the previous quarter,” explained the BSP.

The survey monitored the specific credit standards of top corporations, large middle market enterprises, SMEs, and micro enterprises. The finding was that the loan margins were “significantly reduced and collateral requirements were not tightened for top corporate loan accounts.”