Growth in commercial banks’ outstanding loans including reverse repurchase agreements (RRPs) continued to be in the double-digits at 11.1 percent year-on-year in June from 10.2 percent in May, to reach P2.2 trillion at end-June. Net of RRP placements with the BSP, growth in bank lending at 14.3 percent remained strong, albeit slower than the 17.3 percent growth recorded in the previous month. On a month-on-month basis, commercial banks’ seasonally-adjusted lending in June grew by 4.5 percent for loans inclusive of RRP placements, but fell by 0.3 percent net of RRP placements.
Preliminary data showed that loans for production activities expanded year-on-year by 14.4 percent in June, lower than the 17.1 percent growth reported in the previous month. Loans extended to the following productive sectors, which comprised nearly half of total loans, were major contributors to lending growth: agriculture, hunting, and forestry (which grew by 38.7 percent); real estate, renting and business services (27.6 percent); transportation, storage & communication (59.0 percent); electricity, gas and water (28.3 percent); and financial intermediation (19.4 percent). Loans to the following sectors likewise expanded: wholesale and retail trade; other community, social and personal services; public administration and defense; health and social work; fishing; and mining and quarrying. In contrast, bank lending to manufacturing and construction registered contractions during the month. Manufacturing loans—which accounted for 15.2 percent of total loans—contracted by 12.6 percent, reflecting, in part, the negative impact of the global financial crisis on export growth, while the growth in construction loans remained negative at 12.5 percent, influenced by the weak demand for housing projects and new office spaces.
Growth in consumption loans moderated to 7.2 percent this month from 9.6 percent in the previous month, following the markedly slower growth in auto loans, the lower growth in credit card lending, and the continued contraction in other types of consumption loans.
BSP Officer-In-Charge Nestor A. Espenilla, Jr. noted that the stable growth in outstanding loans partly reflects the easing of monetary policy since the fourth quarter of 2008, as the easier flow of credit continued to support the productive sectors of the economy even against the backdrop of tight liquidity conditions in global financial markets. He added that the BSP going forward will continue to monitor unfolding economic and financial developments to ensure that the monetary policy stance remains supportive of the economy’s non-inflationary growth path.