Based on preliminary data obtained from the new system of bank reporting under the Financial Reporting Package, outstanding loans of commercial banks (including reverse repurchase agreements or RRPs) grew at a faster pace in May at 15.4 percent year-on-year, higher than the 10.3 percent (revised) and 7.7 percent expansions posted in March and April, respectively. Bank lending net of banks’ RRP placements with the BSP reflected the same trend, as it increased by 15.8 percent year-on-year in May, from 14.6 percent in April. Revised March data showed bank lending net of RRPs grew by 16.1 percent.
The Financial Reporting Package (FRP), which replaced the Consolidated Statement of Condition (CSOC) reports, adopted the detailed classification of the amended 1994 Philippine Standard Industrial Classification (PSIC) for international comparability. The system classifies lending by production activities (which covers 16 economic sectors) and by household consumption purposes (with three economic categories). Previously, bank reports classified loans into only 9 economic sectors.
Loans for production activities, which accounted for the bulk of total outstanding loans, grew by 13.6 percent in May, after posting expansions for March and April of 14.4 percent (revised) and 12.9 percent, respectively. In May, production loans were driven largely by credit extended to electricity, gas and water (47.1 percent growth year-on-year); other community, social and personal services (83.9 percent); real estate, renting, and business services (14.1 percent); agriculture, hunting, and forestry (10.3 percent); manufacturing (5.2 percent); and public administration and defense (44.9 percent).
Consumption loans, which accounted for about 8 percent of total loans, rose by 21.6 percent in May, higher than the growth of 19.4 percent (revised) in March and 15.0 percent in April. The growth in consumption loans was reflected mainly by an expansion in credit card receivables.
The BSP keeps an eye on bank lending trends to ensure that these are consistent with the economy’s growth and inflation objectives.