Lending activity continued to expand in January 2009. Outstanding loans of commercial banks including reverse repurchase agreements or RRPs increased by 18.8 percent year-on-year in January 2009 from 17.5 percent in December 2008, while bank lending net of banks’ RRP placements with the BSP grew more rapidly by 24.5 percent from 20.5 percent in the previous month.
Preliminary data for January 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 (which covers 16 economic sectors) and by household consumption purposes (with three economic categories). Previously, bank reports classified loans into nine economic sectors only.
Loans for production activities, which accounted for the bulk of total loans, grew by 22.0 percent in January from 18.3 percent in December. The following production sectors contributed significantly to lending growth: agriculture, hunting, and forestry (which grew by 44.6 percent); real estate, renting, and business services (36.1 percent); transportation, storage and communication (77.6 percent); wholesale and retail trade (24.1 percent); and electricity, gas and water (18.5 percent).
Consumption loans rose by 16.4 percent in January from 13.4 percent in December. The growth came mostly from credit card receivables which expanded by 17.2 percent from 20.5 percent in the previous month. Auto loans rose by 29.3 percent from 10.5 percent in the previous month. Meanwhile, loans for other household consumption contracted at a lower rate of 7.9 percent in January from the decline of 16.3 percent posted in December.
BSP Governor Amando M. Tetangco, Jr. noted that the BSP carefully monitors bank lending trends to obtain information on liquidity and credit conditions, especially given current developments in global financial markets. He said that the BSP will continue to keep a close watch over developments in both domestic and global financial markets to make sure that monetary policies respond appropriately and promptly as warranted by economic conditions.