PH Bank Lending Up 8.9% in December
Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the Bangko Sentral ng Pilipinas (BSP), continued to expand in December 2010 by 8.9%, broadly similar to the previous month’s expansion of 9%. Bank lending inclusive of RRPs grew at a slower rate of 8.9% from an expansion of 10.3% in November, to reach PhP2.6 trillion. On a month-on-month seasonally-adjusted basis, commercial banks’ lending in December rose by 1.7% for loans net of RRPs and by 2.2% for loans inclusive of RRPs.
The growth of loans for production activities—which comprised more than four-fifths of commercial banks’ total loan portfolio—accelerated to 10.1% in December from 9.9% a month earlier. Meanwhile, the growth in consumer loans, which include credit card receivables and auto loans, slowed to 8.9% from 12% previously.
The growth of production loans was driven mainly by increased lending to manufacturing (which grew by 18.2%); agriculture, hunting and forestry (13.4%); and real estate, renting and business services (12.2%). Lending to construction activities also continued to expand at a brisker pace of 15.6% from 13.5% in the previous month. Meanwhile, contractions were posted in lending to transportation, storage and communication (-3.6%) and other community, social and personal services (-10.9%).
The continued expansion in bank lending, particularly to the productive sectors of the economy, reflects the solid growth in real sector activity. Going forward, the BSP will continue to ensure that credit conditions remain supportive of the strengthening domestic economy to the extent consistent with its inflation objectives.
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