Growth in outstanding loans of commercial banks, net of banks' reverse repurchase (RRP) placements with the BSP, accelerated in July to 19.1 percent from the previous month's expansion of 18.8 percent. This is the highest growth rate recorded since April 2009. Likewise, bank lending inclusive of RRPs expanded at a brisker pace of 23.6 percent from 20.5 percent in June, to reach P2.8 trillion. Commercial banks' loans have been growing steadily at double-digit growth rates since January 2011. On a month-on-month seasonally-adjusted basis, commercial banks' lending in July grew by 1.4 percent for loans net of RRPs and by 3.0 percent for loans inclusive of RRPs.
Loans for production activities-which comprised more than four-fifths of commercial banks' total loan portfolio-grew steadily at 20.5 percent in July from 20.6 percent a month earlier. Meanwhile, the growth in consumer loans rose to 15.6 percent from 14.1 percent during the same period due mainly to the expansion in credit card receivables and auto loans, which grew by 7.8 percent and 27.0 percent, respectively.
The expansion in production loans continued to be driven largely by higher lending to electricity, gas and water (which grew by 54.2 percent); real estate, renting and business services (23.3 percent); manufacturing (15.5 percent); wholesale and retail trade (21.8 percent); financial intermediation (24.6 percent); transportation, storage and communication (25.6 percent); and construction (18.4 percent). There was also a significant expansion in loans to mining and quarrying, with lending to this sector quadrupling. Meanwhile, contractions were posted in lending to three production sectors, namely, education (-12.9 percent), health and social work (-12.3 percent); and public administration and defense (-4.3 percent).
The steady growth in bank lending during the month is expected to support the growth momentum of the domestic economy. While maintaining an inflation path consistent with the Government's inflation target over the medium term, the BSP will continue to support the domestic economy by ensuring ample liquidity and appropriate credit conditions.