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A Second Look at Credit Crunch: The Philippine Case

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  • Lamberte, Mario B.

Abstract

This paper tries to verify empirically the claim that there has been a credit crunch in the Philippines since the onset of the Asian financial crisis in July 1997. The results of the analysis using both macro and micro level data do not support such claim. Instead, the results tend to show that the current slowdown in bank loans is merely a reflection of the economic downturn. The paper recommends that policymakers focus their attention on raising aggregate demand using both monetary and fiscal policies.

Suggested Citation

  • Lamberte, Mario B., 1999. "A Second Look at Credit Crunch: The Philippine Case," Discussion Papers DP 1999-23, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_1999-23
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    File URL: https://www.pids.gov.ph/publication/discussion-papers/a-second-look-at-credit-crunch-the-philippine-case
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    References listed on IDEAS

    as
    1. Wei Ding & Domac, Ilker & Ferri, Giovanni, 1998. "Is there a credit crunch in East Asia?," Policy Research Working Paper Series 1959, The World Bank.
    2. Richard Cantor & John Wenninger, 1993. "Perspective on the credit slowdown," Quarterly Review, Federal Reserve Bank of New York, vol. 18(Spr), pages 3-36.
    3. R. Glenn Hubbard, 1995. "Is there a \\"credit channel\\" for monetary policy?," Review, Federal Reserve Bank of St. Louis, issue May, pages 63-77.
    4. Stephen G. Cecchetti, 1995. "Distinguishing theories of the monetary transmission mechanism," Proceedings, Federal Reserve Bank of St. Louis, issue May, pages 83-97.
    5. Frederic S. Mishkin, 1996. "The Channels of Monetary Transmission: Lessons for Monetary Policy," NBER Working Papers 5464, National Bureau of Economic Research, Inc.
    6. Bernanke, Ben S & Blinder, Alan S, 1988. "Credit, Money, and Aggregate Demand," American Economic Review, American Economic Association, vol. 78(2), pages 435-439, May.
    7. Lamberte, Mario B. & Orbeta, Aniceto Jr. C. & Cororaton, Caesar B. & Guerrero, Margarita F., 1999. "Impacts of the Southeast Asian Financial Crisis on the Philippine Manufacturing Sector," Discussion Papers DP 1999-09, Philippine Institute for Development Studies.
    8. Ben S. Bernanke, 1993. "Credit in the macroeconomy," Quarterly Review, Federal Reserve Bank of New York, vol. 18(Spr), pages 50-70.
    9. R. Glenn Hubbard, 1995. "Is there a \"credit channel\" for monetary policy?," Proceedings, Federal Reserve Bank of St. Louis, issue May, pages 63-77.
    10. Brunner, Karl & Meltzer, Allan H, 1988. "Money and Credit in the Monetary Transmission Process," American Economic Review, American Economic Association, vol. 78(2), pages 446-451, May.
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    Cited by:

    1. International Monetary Fund, 2007. "Philippines: Selected Issues," IMF Staff Country Reports 2007/131, International Monetary Fund.
    2. Lamberte, Mario B., 2001. "The Philippine Payment System: Efficiency and Implications for the Conduct of Monetary Policy," Discussion Papers DP 2001-20, Philippine Institute for Development Studies.
    3. Lamberte, Mario B., 2000. "The Philippines: Challenges for Sustaining the Economic Recovery," Discussion Papers DP 2000-02, Philippine Institute for Development Studies.

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    Keywords

    Asian financial crisis;

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