A study of the determinants of interest spreads in the Philippines from 2000-2009

Date of Publication

2010

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Stephanie Chan

Defense Panel Chair

Christian Paolo Romagos

Defense Panel Member

Ma. Esperanza Joven
Maricon Latoja

Abstract/Summary

This paper examines the factors affecting the interest spreads in both the commercial and universal banking industry in the Philippines for the past decade, 2000-2009. An ordinary least squares regression model was used in measuring the effects of the variables. The data used were taken from the Bangko Sentral ng Pilipinas (BSP) and the National Statistical Coordination Board (NCSB) at quarterly intervals. The group classified the variables observed either as bank-specific or as a macroeconomic variable. The bank-sepcific variables consist of aggregate operating cost, aggregate liquidity, aggregate credit risk, and the market structure of each banking industries. While the macroeconomic variables consist of aggregate required reserves, real gross domestic product (GDP) growth, inflation rate, and discount rates.

Banking competition may exist in different degrees across countries. In the Philippines' case, the market structure as measured by the herfindahl index shows that competition exists and that no monopolistic behavior is present in each of the banking sectors. The results show that both bank-specific and macroeconomic factors may affect the interest spreads of both banking industries in the country.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU21855

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

55, [15] leaves

Keywords

Financial institutions--Management; Banks and banking--Philippines

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