Firm characteristics and accessibility to credit of firms in the Philippines

• Main Authors: Camacho, Emmanuel, Carpio, Jonathan Leo, Pena, Maria Andrea, Oblego, Jarden Adrian
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11396
• Institution: De La Salle University

Studies show that accessibility to credit of firms is important for business growth and expansion. However, there is scant evidence of credit constraints on different kinds of firms in the Philippines. Using a cross-sectional firm data employed in the Philippines, we present an ordinal logistical regression analysis where we examine the relationship of firm characteristics to the likelihood of increased access to credit of firm in the said country. Firm characteristics include firm size, firm age, industry, region, ownership, and gross profit margin. The analytical results indicate that firm size, region and foreign ownership are the significant firm characteristics that lending institutions consider in granting loans to firm in the Philippines. Results also show that SME's in the Philippines face lesser access to credit. Results also suggest that lending institutions often disregard firm's age and profitability in making loan decisions.