Driven by production activity
Bank lending in the Philippines rose at a faster pace year-on-year in September compared with the rate of growth in August, despite the slowdown in money supply during the period, data from the Bangko Sentral ng Pilipinas (BSP) showed on Friday.
The bulk of lending went to production activities, led by wholesale and retail trade; real estate, renting, and business services; manufacturing; electricity, gas and water; and financial intermediation, according to BSP’s figures.
Outstanding loans granted by commercial banks, net of reverse repurchase (RRP) placements with the central bank, posted 20.5 percent growth in September, pacing up from the revised 20.1 percent in August.
Including the RRPs, bank lending expanded by 19.5 percent from the revised 18.6 percent growth posted in the previous month. On a seasonally adjusted basis, commercial bank lending increased by 2.1 percent for loans net of RRPs month-on-month and by 2.9 percent for loans inclusive of RRPs.
Loans approved for production activities, which comprise more than four-fifths of banks’ aggregate loan portfolio, expanded by 18.7 percent in September from the revised 19 percent in August.
The central bank said the expansion in production loans was driven by increased lending for wholesale and retail trade; real estate, renting, and business services; 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 1.8 percent,” the BSP said.
Meanwhile, the BSP said loans for household consumption grew by 17.7 percent in September from the revised 16.7 percent in the previous month.
The central bank attributed the increase to the continued growth in auto loans, salary 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,” the BSP stated.