Community Whispers by Ray Junia
Community Whispers

Credit activity shrinks because banks are not lending!

Aug 3, 2021, 12:04 AM
Ray L. Junia

Ray L. Junia


MARK Twain likens a banker to an owner of an umbrella.

“A banker is a fellow who lends you an umbrella when the sun is shining and wants it back the minute it begins to rain,” he said.

This was how banks behaved centuries ago. I suppose nothing has changed in our modern times.

A businessman’s common complaint is, banks are fast to lend to those who have no intention to take credit, but too slow to those in dire need of money, if ever approved.

So there goes the explanation why bank lending has shrunk for 7th straight month.


The reality is, of the over 100 million Filipinos, only about 30% is educated on banking and experienced banking transaction.

Studies say the Philippines has very high percentage of the population that does not have bank savings.

My study says over 70% of the population does not have the means to have bank savings. Most of Filipinos are just dirt poor to have savings in a bank.


Getting educated on banking reminds me of a story of one businessman. He went to the bank and asked a bank officer,

“what’s a joint account? I and my wife want to open one”.

In all honesty, the bank officer explained, “a joint account is one where the husband makes all the deposits and wife does all the withdrawals”.


Bangko Sentral headman Benjamin Diokno claims credit activity remains weak, as measures to address the still elevated number of Covid-19 cases constrained domestic economic activity and continued to dampen market sentiment.

He explained further, “banks remained risk-averse as the industry’s gross non-performing loans increased to 4.5% in May from 4.4% in April”.

So, the shrink in lending is caused primarily by the banks’ decision not to lend out.

I get reminded of a time I was in this universal bank. One lady in her forties walked in to apply for a loan, “a way to better her business,” she said.

Her application got turned down, she exclaimed, “I must be talking to the wrong person. May I talk to that beautiful lady in your billboards who says this bank finds ways”.


If you’re hunting for better office space, now is the best time to do that.

Reports say office vacancy rises to 15.6%. My snoop says that figure is an understatement.

His bold guess is the rise in vacancy is in the vicinity of 30%. And if office space lessors are not offering big discounts to current tenants, the rate would go up to 50%.

Go around the financial districts of the big city and see loud signs of office spaces being offered for rent.

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