Sobrang sakim! Joey Salceda chides banks for snapping up stocks instead of lending more money

By Billy Begas

Instead of lending more money to struggling businesses, House Committee on Ways and Means chairperson and Albay Rep. Joey Salceda said banks urged their money to buy stocks and bonds.

Salceda pointed this out in today’s hearing of the House Committee on Banks and Financial Intermediaries citing the report of the Bangko Sentral ng Pilipinas showing that the lending growth in the banking sector hit its lowest in 14 years.

The BSP released some P1.9 trillion in liquidity from March to December 2020.

“We made money cheaper not so you can buy more stocks and bonds, but so that you can lend more to struggling businesses. As it is, you will only make your shareholders richer, but your hesitation to lend will do nothing to solve this crisis, or help small businesses. Let me remind you that taxpayers are subsidizing your asset management, and depositors are subsidizing you through this crisis with lower interest rates,” said Salceda.

Salceda said that less than one percent of Filipinos own shares of stocks.

“Due to trading gains, many banks retained their handsome dividends. Some dividends were one-time giveaways of up to 8% in cash to shareholders… Because of lack of credit, however, thousands of enterprises, along with hundreds of thousands of jobs, are gone for good,” Salceda added.

Salceda also reminded banks that the government intervenes on their behalf so they can lend more, not so that they can be wealth management companies.

“You are not hedge funds. Your role in Philippine society is to lend. The reason why we prioritize saving you above most other sectors is that you play that critical role in economic recovery. If you will not play that role enough, why should we ask the taxpayer and the depositor to make sacrifices on your behalf?” the solon said.

He warned that the BSP’s efforts to prop up the economy will remain unsuccessful until more banks lend to more customers.

He said the BSP cut the interest rate to allow banks to give more credit but this “didn’t work”.

Salceda is pushing for the passage of the proposed Fair and Inclusive Credit Reporting Act (House Bill 7863).

The measure seeks to respond to the urgent need to translate more financial system liquidity into credit in the real economy to help the country recover from the economic fallout of COVID-19.

“By allowing more people to access loans at fairer and more inclusive terns, this bill will help spur more productive economic activity in the most vulnerable segments of society,” he pointed out.

Source: Latest Politics News Today (Politics.com.ph)