A study on the effects of the 2008 financial crisis on the existence of a bank lending channel in the Philippines from years 2006-2012

• Main Authors: Ayroso, Ysabel Clarisse L., Casimiro, Hazel F., Soliman, Clarisse Nicole V., Sy, Deborah Kim S.
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Global Financial Crisis, 2008-2009; Financial crises > Philippines; Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7849
• Institution: De La Salle University

The paper aims to investigate the impact of the 2008 global financial crisis on the existence of the bank lending channel in the Philippines from 2006 to 2012. Panel ordinary least squares (OLS) method is utilized to verify the existence of a bank lending channel through the effects of monetary policy changes on the loan portfolio growth of 35 universal and commercial banks. Furthermore, the possible effect of the crisis is taken into account by dividing the time period before and after the crisis. The results obtained establish that the 2008 financial crisis had an effect on the existence of the bank lending channel. It was observed that prior to the crisis, the transmission of monetary policy through the bank lending channel was operative. However, due to minimal capital levels and liquidity constraints brought about by the instability of the financial services industry, results suggest that the bank lending channel was deemed ineffective after the crisis.