The growth in outstanding loans of commercial banks including reverse repurchase agreements (RRPs) remained strong at 18.9 percent in March. Net of RRP placements with the BSP, lending likewise expanded by 17.8 percent. The rise in bank loans, was, however slightly lower when compared to the expansion in the previous month, which were 22.5 percent and 22.6 percent, respectively.
Preliminary data for March indicated that loans for production activities continued to lead the expansion this month, although at a slower rate of 16.8 percent from 20.0 percent in the previous month. The following production sectors contributed significantly to growth in production loans: agriculture, hunting, and forestry (70.1 percent); real estate, renting and business services (41.1 percent); electricity, gas and water (31.3 percent); financial intermediation (16.4 percent); other community, social and personal services (41.9 percent); and transportation, storage & communication (20.7 percent). Meanwhile, bank lending to wholesale and retail trade, mining & quarrying, and manufacturing, which together accounted for nearly one-third of total production loans, registered contractions during the month.
Consumption loans continued to grow, albeit at a slower rate of 9.0 percent in March compared to 15.2 percent in February, reflecting the marked slowdown in the growth of credit card and auto loans receivables at 8.7 percent and 27.1 percent, respectively. Other types of loans also recorded a bigger decline from negative 7.2 percent last month to negative 17.0 percent in March.
BSP Governor Amando M. Tetangco, Jr. noted that bank lending growth remained broadly stable despite the ongoing global economic slowdown resulting from the financial crisis. He also pointed out that the liquidity-enhancing measures undertaken earlier by the BSP supported credit activity in the system.