Outstanding loans of commercial banks, thrift banks, and rural banks (excluding reverse repurchase or RRPs) expanded by 9.3 percent year-on-year in January from the 7.9 percent (revised) growth in December 2007. This was also higher compared to the 5.8 percent growth registered in the same month a year ago. On a month-on-month basis, seasonally-adjusted lending was broadly stable, registering a growth of 1.6 percent for end-January.
Gross of banks’ RRP placements with the BSP, bank lending grew by 5.4 percent year-on-year in January. This was lower compared to the 9.3 percent expansion in the previous month and the 10.2 percent growth recorded in the same month of the previous year. On a month-on-month basis, seasonally-adjusted lending declined by 3.2 percent from the 3.6 percent expansion registered a month ago.
In terms of percentage-point contribution to the increase in bank lending (net of RRPs), the bulk came from lending to financial institutions, real estate and business services (net of RRPs), which contributed 3.6 percentage points; electricity, gas and water, 2.9 percentage points; and community, social, and personal services, 2.3 percentage points. Growth also came from lending to the transportation, storage, and communication sector with a contribution of 1.0 percentage point, and wholesale and retail trade, 0.9 percentage point. Meanwhile, bank lending to agriculture, fisheries, and forestry (AFF); mining and quarrying; manufacturing; and construction declined during the period.
The BSP’s monetary easing in previous months is expected to boost credit growth in the months ahead, in tandem with the expected growth of economic activity. Monetary authorities will continue to closely monitor developments in bank lending because of its critical role in promoting stronger output growth.