Bank lending, exclusive of banks' reverse repurchase (RRP) placements with the BSP, grew at a brisker pace of 11.0 percent in January from an expansion of 8.9 percent in the previous month. Likewise, outstanding loans of commercial banks, inclusive of RRPs, registered a stronger growth of 12.4 percent in January from 8.9 percent in December to reach P2.5 trillion. On a month-on-month seasonally-adjusted basis, commercial banks' lending in January rose by 1.5 percent for loans net of RRPs and 1.9 percent for loans inclusive of RRPs.
The growth of loans for production activities-which comprise more than four-fifths of commercial banks' total loan portfolio-accelerated to 12.4 percent in January from 10.1 percent a month earlier. Meanwhile, the growth of consumer loans (which include credit card receivables and auto loans) was broadly steady at 8.7 percent.
The growth of production loans was driven largely by increased lending to manufacturing (which grew by 26.7 percent); real estate, renting and business services (17.7 percent); wholesale and retail trade (14.2 percent); electricity, gas and water (21.3 percent); and agriculture, hunting and forestry (6.4 percent). Lending to construction activities also continued to expand, although at a slower pace of 7.8 percent from 15.6 percent in the previous month. Meanwhile, contractions were posted in lending to a few productive sectors, including financial intermediation (-5.7 percent) and education (-13.1 percent).
The continued growth in bank lending largely reflects the buoyancy of domestic demand and improving prospects for the economy. Going forward, monetary authorities will continue to ensure that liquidity and credit conditions remain consistent with the BSP's price stability objective.