The loans outstanding of commercial banks, which amounted to P1.45 trillion as of end-April 2001, grew at a faster year-on-year rate of 6.2 percent compared to 5.5 percent in the previous month. This rate of increase in loans outstanding of commercial banks was also higher than the 5.1 percent annual growth recorded in the same period last year. Banks’ lending to the electricity, gas and water sector accelerated by 35.6 percent, while lending to the manufacturing sector surged by 10.5 percent. In the case of the manufacturing sector, it was the first time such a double-digit rate of expansion was registered since October 2000.
The manufacturing sector was the main beneficiary of commercial bank lending as this sector maintained the biggest share to total loans outstanding of commercial banks (28.2 percent); followed by financial institutions, real estate and business services (25.8 percent) and wholesale and retail trade (14.1 percent). Taken altogether, these three sectors accounted for about seven-tenths of total bank lending.
The faster growth of bank lending activity in April is consistent with the continued expansion of domestic liquidity, which grew by 13.0 percent in April from 11.8 percent in the previous month. It also reflects the accommodative monetary policy stance pursued by the BSP over the past few months, which was signaled in the market through the reduction in policy rates.