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Bank Lending Continues to Expand in December

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, expanded by 16.4 percent in December from the previous month’s growth of 14.8 percent.

Similarly, bank lending inclusive of RRPs grew at a faster pace of 16.3 percent from 13.8 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 2.8 percent for loans net of RRPs and by 3.4 percent for loans inclusive of RRPs.

Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio— expanded further by 15.3 percent in December from 13.2 percent in November. The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (which grew by 22.0 percent); electricity, gas and water (33.6 percent); manufacturing (15.5 percent); wholesale and retail trade (16.9 percent); and construction (51.8 percent). However, declines were observed in lending to transportation, storage and communication (-2.8 percent); and other community, social and personal services (-2.2 percent).

Meanwhile, loans for household consumption grew by 8.3 percent from 9.0 percent in the previous month, reflecting the slowdown in the growth of auto loans and other types of loans (i.e. personal loans and salary loans).

The sustained expansion in bank lending is expected to support the continued positive outlook of the domestic economy for the year ahead. Going forward, the BSP will ensure that credit and liquidity conditions will keep at pace with overall economic growth while remaining consistent with its price and financial stability objectives.

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