Government agencies met at the central bank last week to discuss ways to spur banking lending to SMEs, which remains lethargic despite a government financing programme for the sector.
Trade and Industry Secretary Cesar V. Purisima said after the meeting that the government wants to triple the amount of loans to the sector.
The Bangko Sentral ng Pilipinas will lift banks' reserve requirements for loans to small- and medium-sized enterprises (SMEs) to encourage more bank lending to the SME sector, a central bank official said.
Banks' loans to SMEs are subject to central bank's reserve requirements because these are treated as deposit substitutes or alternative instruments to obtain funds from the public.
