Bank lending in the Philippines expanded at a slightly faster rate in July, suggesting that the pace of domestic economic activity remains strong, the central bank said.
Outstanding loans granted by commercial banks, excluding reverse repurchase (RRP) placements with the central bank, rose at a faster rate of 21.8 percent in July from the previous month’s increase of 20.1 percent, data from the Bangko Sentral ng Pilipinas (BSP) showed on Friday.
Including the RRPs, bank lending expanded by 20.4 percent, up from the 18.7 percent growth in the previous month. On a seasonally adjusted basis, commercial bank lending increased by 2.7 percent for loans net of RRPs month-on-month and by 2.1 percent for loans inclusive of RRPs.
Comprising more than four-fifths of banks’ aggregate loan portfolio, loans for production activities expanded further by 20.9 percent in July from 17.7 percent in June.
The central bank said the expansion in production loans was driven primarily by increased lending for real estate, renting, and business services; wholesale and retail trade; manufacturing; electricity, gas and water; and financial intermediation.
“Bank lending to other sectors also rose during the month, except for public administration and defense which declined by 2.3 percent,” the BSP said.
Loans for household consumption grew at a rate of 16 percent, only slightly slower than the 16.2 percent growth rate recorded in June. The BSP said the steady growth of household loans reflected the continued expansion in auto loans and other types of loans such as salary loans and personal loans, while offsetting the slight slowdown in the growth of credit card loans, it added.
Finally, the central bank said it will continue to ensure that credit and liquidity conditions will keep at pace with economic growth while remaining consistent with its price stability mandate.