Outstanding loans of commercial banks, thrift banks and rural banks (inclusive of reverse repurchase or RRPs) grew by 5.1 percent year-on-year in June from the 4.5 percent growth recorded in May. This was also higher than the 1.3 percent growth in the same period last year. On a month-on-month basis, seasonally adjusted lending data posted a growth of 1.0 percent, a reversal of the 7.6 percent contraction registered a month ago.
Net of banks’ RRP placements with the BSP, bank lending grew by 4.7 percent year-on-year in June compared to the 6.9 percent growth posted in the previous month. This was an improvement from the 1.8 percent expansion registered in the same month a year ago.
Bank lending to all sectors of the economy, except manufacturing and mining, posted expansions during the period. The financial institutions, real estate and business services (FIREBS) sector (net of RRPs), grew by 6.5 percent year-on-year in June from a 13.7 percent growth in the previous month. Loans to the community, social and personal services, the wholesale and retail trade and construction sectors grew by 13.2 percent, 4.7 percent and 8.7 percent, respectively. Lending to the agriculture, fisheries and forestry sector rose by 7.4 percent while lending to the transportation, storage and communication sector increased by 12.3 percent. Loans to the utilities sector registered a modest growth of 1.6 percent.
Loans to the manufacturing sector, representing nearly one-fifth of total loans, contracted further by 5.9 percent while loans to the mining and quarrying sector declined anew by 9.5 percent.
Meanwhile, preliminary data indicate that non-bank sources of corporate funds have risen this year to date compared to the trend during the same period in 2006, pointing to firms’ diversification of funding sources.
The BSP continues to closely watch credit trends to ensure that developments in bank lending and other sources of financing are consistent with price stability and supportive of the liquidity demands of the economy.