Date of Publication


Document Type

Master's Thesis

Degree Name

Master of Science in Economics (Ladderized)

Subject Categories



School of Economics



Thesis Advisor

Lawrence Dacuycuy

Defense Panel Chair

Dickson Lim

Defense Panel Member

Johnny Noe Ravalo
Joselito Basilio
Justin Raymond Eloriaga


The emergence of the COVID-19 pandemic has put to question the effectiveness of policy rate adjustments made by the central banks can affect the bank lending behavior, even during episodes of systemic shocks. However, in the Philippines, current policy rates have not been effective in alleviating the systemicness brought up by bank lending to non-financial institutions. Since the start of the global pandemic, various banks have not been increasing their lending activity even with the accommodating monetary policy stance of Bangko Sentral ng Pilipinas (BSP) towards bank lending. I test the relationship between (expansionary and contractionary) monetary policies and the banks' loan portfolio growth through different assets and bank classes. I use a two-step Difference Generalized Method of Moments (2S-DiffGMM) to test this relationship using gross total loan portfolio growth from various banks in the Philippines and their respective levels of policy rates as reported by Bangko Sentral ng Pilipinas. I find that the relationship between monetary policies and the total loan portfolio's growth is significant but has a near-zero impact and conflicts with conventional theories. We also find that for universal and commercial banks, almost all the policy variables are insignificant. Lastly, the significance of the policy rates decreases through banks with large total assets. We provide some preliminary analyses and insights into these key findings as well as policy recommendations on building resilience and distinguishing monetary and systemic risk policies.

Abstract Format




Physical Description

45 leaves


Monetary policy--Philippines; Risk--Philippines; Bank loans--Philippines; Bank reserves--Philippines

Upload Full Text


Embargo Period