Consumers, corporations encouraged to borrow due to lower rates

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) encouraged both consumers and corporations to borrow, citing low interest rates which have fallen to an average of 7.5 percent since the start of the year.

Like most central banks the world over, the BSP has chosen to infuse liquidity in the Philippines’ financial system, a move that goads consumers to borrow to acquire cars, houses, and appliances. Cheaper loans also attract businesses, assisting them in their expansion.

But at the same time, making liquidity available is just half of the solution.

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