December 08, 2009

LISTED Philippine banks’ income from lending operations in the third quarter tracked the slowdown in the economy, despite the low-yield environment that should have encouraged credit activity.Fourteen of the 17 banks listed on the Philippine Stock Exchange (PSE) reported a combined interest income of P53.4 billion in the July to September period, accounting for 2.9% of third quarter gross domestic product (at current prices), which was firmer than their 2.8% share to economic output a year ago, BusinessWorld computations using PSE and government data show.

That should give credence to the government’s claim that the economy, which grew by a disappointing 0.8% in the third quarter, got some push from an uptick in bank lending.But the trend in the past three quarters from January showed a diminishing share of listed banks’ interest income to economic output. They contributed 3.3% and 3% in the first quarter and second quarter, respectively.