Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, continued to expand in December by 8.9 percent, broadly similar to the previous month’s expansion of 9.0 percent. Bank lending inclusive of RRPs grew at a slower rate of 8.9 percent from an expansion of 10.3 percent in November, to reach P2.6 trillion. On a month-on-month seasonally-adjusted basis, commercial banks’ lending in December rose by 1.7 percent for loans net of RRPs and by 2.2 percent for loans inclusive of RRPs.
The growth of loans for production activities—which comprised more than four-fifths of commercial banks’ total loan portfolio—accelerated to 10.1 percent in December from 9.9 percent a month earlier. Meanwhile, the growth in consumer loans (which include credit card receivables and auto loans) slowed to 8.9 percent from 12.0 percent previously.
The growth of production loans was driven mainly by increased lending to manufacturing (which grew by 18.2 percent); agriculture, hunting and forestry (13.4 percent); and real estate, renting and business services (12.2 percent). Lending to construction activities also continued to expand at a brisker pace of 15.6 percent from 13.5 percent in the previous month. Meanwhile, contractions were posted in lending to transportation, storage and communication (-3.6 percent) and other community, social and personal services (-10.9 percent).
The continued expansion in bank lending, particularly to the productive sectors of the economy, reflects the solid growth in real sector activity. Going forward, the BSP will continue to ensure that credit conditions remain supportive of the strengthening domestic economy to the extent consistent with its inflation objectives.