Bank Lending Expands in September

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slightly faster pace at 20.5 percent in September from the previous month’s increase of 20.1 percent (revised). Similarly, bank lending inclusive of RRPs expanded by  19.5 percent from the 18.6 percent (revised) growth posted in the previous month.

On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 2.1 percent for loans net of RRPs and by 2.9 percent for loans inclusive of RRPs.

Loans for production activities—which comprised about four-fifths of banks’ aggregate loan portfolio—expanded by 18.7 percent in September from 19.0 percent (revised) in August. The rise in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade (20.8 percent); real estate, renting, and business services (12.9 percent); manufacturing (13.8 percent); electricity, gas and water (27.1 percent); and, financial intermediation (25.4 percent). Bank lending to other sectors also rose during the month except for public administration and defense, which declined by 1.8 percent.

Loans for household consumption grew by 17.7 percent in September from 16.7 percent (revised) in August, primarily due to the continued expansion in auto loans and other types of loans (i.e. salary loans and personal loans) which offset the slight slowdown in the growth of credit card loans.

Going forward, the BSP will continue to ensure that domestic credit and liquidity conditions will remain supportive of economic growth while remaining consistent with its price stability objective.