Bank lending growth eased to 12.5 percent last month from 14.1 percent in August on slower takeup of production activity- and household consumption-related loans, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Including reverse repurchase placements (RRPs) with the central bank, lending on a year-on-year basis also slowed to 14.1 percent compared to the 14.3 percent recorded the previous month.
Month-on-month and seasonally-adjusted, commercial bank lending increased by 0.5 percent for loans net of RRPs and by 1.8 percent for loans inclusive of RRPs.
Lending for production activities, which comprised over 80 percent of the aggregate loan portfolio, saw growth ease to 13 percent in September from 13.8 percent in August.
This was driven primarily by real estate activities, which accounted for 20.3 percent; followed by electricity, gas, steam, and air-conditioning supplies, 26.8 percent; wholesale and retail trade, and repair of motor vehicles and motorcycles, 13.7 percent; and financial insurance activities,15.6 percent.
“Bank lending to other sectors, likewise, expanded during the month except for transportation and storage, and manufacturing, which declined by 0.1 percent and 2.1 percent, respectively,” the central bank said.
Loans for household consumption, meanwhile grew by 12 percent, down from 14 percent in August. The BSP noted “sustained growth in credit and card loans and auto loans.”
“Going forward, the BSP will continue to ensure that domestic credit and liquidity conditions will keep pace with overall economic growth while remaining consistent with its price and financial stability objectives,” it said.
Last week, the BSP reported that lending standards at banks remained broadly unchanged during the third quarter but households were granted a bit more leniency.
With regard to loans to enterprises, the BSP said a survey of loan officers found that: “Respondent banks attributed their unchanged credit standards to their unchanged tolerance for risk and stable economic outlook.”
In terms of household lending, meanwhile, the survey said respondent banks’ reported a slight net easing of their credit standards during the quarter, “reflecting banks’ increased tolerance for risk and improved profile of borrowers.”
Majority of the respondent banks continued to see unchanged overall demand for loans from both enterprises and households.
Business loans, though, could increase given higher inventory and accounts receivable financing needs, along with an improved economic outlook among clients.
For households, demand could rise due to more attractive financing terms and lower interest rates, the central bank said.