Outstanding loans of commercial banks including reverse repurchase agreements or RRPs increased in June by 24.2 percent year-on-year. This reflects an acceleration in the growth of lending relative to May, which was at 15.4 percent. Bank lending net of banks’ RRP placements with the BSP reflected the same trend, as it increased by 18.1 percent year-on-year in June, from 15.8 percent in May.
Preliminary data for June was obtained from the new system of bank reporting under the Financial Reporting Package (FRP), which replaced the Consolidated Statement of Condition (CSOC) reports. The FRP adopts the detailed classification of the amended 1994 Philippine Standard Industrial Classification (PSIC) for international comparability. The FRP also 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.
BSP Governor Amando M. Tetangco, Jr. said that loans for production activities followed the same accelerating trend, growing by 15.7 percent in June compared to 13.7 percent in May. The following production sectors contributed significantly to the expansion of lending: wholesale & retail trade (which grew by 38.5 percent); electricity, gas and water (43.8 percent); transportation, storage & communication (57.0 percent); manufacturing (7.0 percent); agriculture, hunting & forestry (11.0 percent); other community, social & personal services (39.5 percent); and real estate, renting & business services (9.3 percent).
He added that consumption loans also accelerated in June and grew by 22.0 percent, rising from 19.9 percent in May. Consumption loan growth came mostly from credit card receivables which grew by 27.3 percent. Auto loans grew by 15.3 percent in June from a decline of 6.9 percent in May.
The BSP monitors bank lending trends to obtain information on liquidity and credit conditions, and as a leading indicator of future economic activity.