Outstanding loans of commercial banks including reverse repurchase agreements or RRPs rose by 22.9 percent year-on-year in November, slightly lower than the 24.8 percent growth recorded in October. Bank lending net of banks’ RRP placements with the BSP rose by 21.3 percent, also growing slightly lower than the 21.9 percent growth in the previous month.
Preliminary bank lending data for November were obtained from the new system of bank reporting under the Financial Reporting Package (FRP). This system 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 (covering 16 economic sectors) and by household consumption purposes (with three economic categories). Bank reports previously classified loans into only nine economic sectors.
BSP Governor Amando M. Tetangco, Jr. noted that loans for production activities drove the expansion in bank lending, increasing by 18.4 percent in November from 19.2 percent in October. The following production sectors contributed significantly to lending growth: real estate, renting, and business services (which grew by 32.6 percent); agriculture, hunting, and forestry (33.1 percent); transportation, storage and communication (91.4 percent); wholesale and retail trade (29.3 percent); and manufacturing (4.7 percent).
Consumption loans grew by 20.6 percent in November from 21.5 percent in October. The growth came mostly from credit card receivables which expanded by 23.3 percent, down slightly from 24.9 percent in the previous month. Auto loans rose by 12.6 percent from 11.6 percent in the previous month.
The BSP monitors bank lending trends to obtain information on liquidity and credit conditions, especially given current developments in global financial markets. Governor Tetangco pointed out that despite the ongoing global credit strains, domestic lending trends indicate that there is sufficient liquidity circulating in the economy to support growth-promoting activities.