Bank lending growth, net of banks' reverse repurchase (RRP) placements with the BSP, accelerated in February to 12.3 percent year-on-year from an expansion of 11.0 percent in the previous month. Likewise, outstanding loans of commercial banks inclusive of RRPs expanded at a faster pace of 13.6 percent in February from 12.4 percent in January to P2.6 trillion. On a month-on-month seasonally-adjusted basis, commercial banks' lending in February rose by 2.3 percent for loans net of RRPs and by 1.5 percent for loans inclusive of RRPs.
Loans for production activities-which comprised more than four-fifths of commercial banks' total loan portfolio-expanded at a brisker rate of 13.9 percent in February from 12.4 percent a month earlier. This was driven largely by increased lending to manufacturing (which grew by 21.2 percent); electricity, gas and water (36.1 percent); real estate, renting and business services (16.9 percent); wholesale and retail trade (18.0 percent); and agriculture, hunting and forestry (5.5 percent). Growth in lending to construction activities also accelerated to 14.7 percent from 7.8 percent in the previous month. Meanwhile, contractions were posted in lending to some production sectors, including education (-16.4 percent) and financial intermediation (-1.4 percent).
The growth in consumer loans also accelerated to 10.0 percent from 8.7 percent previously due to the stronger growth in credit card receivables, from 2.3 percent in January 2011 to 4.4 percent in February. Meanwhile, the growth in auto loans was steady at 26.4 percent compared with the previous month.
The sustained expansion in bank lending supports the view that the underlying domestic demand momentum remains strong. Officer-In-Charge Juan de Zuñiga, Jr. affirmed the BSP's commitment to help ensure appropriate monetary and financial conditions for continued credit expansion, while promoting the BSP's primary mandate of maintaining price stability.