Q1 real lending rate declines on faster inflation, says BSP

The Philippines’ real lending rate dropped during the first quarter of the year from the quarter earlier, cut by inflation that continued to quicken with the rise in global oil and food prices, the Bangko Sentral ng Pilipinas said on Wednesday. It declined to 2.3 percent from 3.4 percent I n the same comparable period, as inflation accelerated to 4.1 percent from 3 percent while the nominal bank lending rate was unchanged at 6.4 percent. Real lending rate is the difference between the average bank lending rate and inflation. The BSP said that the Philippines ranked fifth among 10 Asian countries in terms of real lending rate in January to March, from the second highest in October to December last year. Indonesia was the country with the highest real lending rate in Asia at 5.6 percent, the Bangko Sentral said. According to the National Statistics Office (NSO), inflation accelerated to 4.5 percent in April, the fastest in 12 months on the back of higher pump prices of petroleum products and more expensive power rates. Thus, the average inflation was 4.2 percent in the first four months of the year from 4.3 percent in the same 2010 period, NSO data showed. Core inflation, which excludes the volatile food and fuel items, also accelerated to 3.8 percent in April from 3.5 percent in March. The BSP has set an inflation target of between 3 percent and 5 percent from 2011 to 2014. — VS, GMA News