NEWSFLASH

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BANKS TO REDUCE INTEREST RATES

Manila, Feb. 6, 1998 - Banks will bring down their prime lending rate by one percentage point every week, starting next week, provided the government maintains treasury bill rates at 18%, according to a plan drawn up by the Bankers Association of the Philippines.

BAP president Deogracias Vistan said the plan intends to bring down the prime lending rates to the desired, more realistic range of 21 to 26 percent.

"Lower interest rates should be a product of competition, but we want to make a commitment to the central bank, the business community and to everybody that our lending rates will go down," Vistan said.

Central bank governor Gabriel Singson said the Bangko Sentral ng Pilipinas will publish in newspapers the interest rates on both deposits accepted by the banks as well as the loans they offer.

"This is to let the public know what spreads the banks are getting now," Singson said. "The business community and the public are beginning to realize that it's really the banks who have the final decision whether interest rates should go down."

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