Moreover, results of stress-testing done by the BSP showed that despite adverse shocks to asset quality and income, banks’ CAR would still be well above both the international standard of 8 percent and the BSP’s minimum regulatory requirement of 10 percent. The banking system as a whole also remains very liquid. Proof of this is that bank lending continues to post significant growth.
As of end-November 2008, bank lending, inclusive of interbank loans, registered a year-on-year growth rate of 22.9 percent. We expect some slowdown in credit expansion going forward as banks tighten credit standards. Nevertheless, loan growth could still be at double-digit, if banks remain keen to spot lending opportunities. Avoiding the negative feedback loop What do all those numbers and data mean?