Bank lending growth, excluding banks’ reverse repurchase (RRP) placements with the BSP, accelerated slightly in August to 12.5 percent year-on-year from an expansion of 11.7 percent in the previous month. Similarly, outstanding loans of commercial banks, inclusive of RRPs, increased by 9.8 percent in August from 8.9 percent in July to reach P2.3 trillion. On a month-on-month seasonally-adjusted basis, commercial banks’ lending increased by 0.7 percent for loans net of RRPs, and by 1.5 percent for loans inclusive of RRPs.
Loans for production activities—which comprise 84.9 percent of banks’ total loan portfolio—expanded at a faster pace of 12.7 percent in August from 12.0 percent previously. Likewise, the growth of consumer loans (credit card, auto loans and others) accelerated to 15.4 percent from 12.5 percent a month earlier.
The faster growth of production loans was traced mainly to increased loans to manufacturing (which grew by 21.9 percent); real estate, renting and business services (12.4 percent); agriculture, hunting and forestry (9.0 percent); electricity, gas and water (19.8 percent); wholesale and retail trade (11.6 percent); and financial intermediation (16.4 percent). Lending to construction activities continued to register double-digit growth of 18.9 percent from 22.0 percent in the previous month. The only sector that posted a decline in August was other community, social and personal services (-20.5 percent).
The upturn in the credit cycle remains consistent with the robust pick-up in domestic demand and the rebound in global trade. The BSP remains steadfast in its efforts to provide the appropriate credit conditions supportive of sustained domestic economic growth, while fulfilling its primary mandate of maintaining price stability.