Growth in outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, rose in October to 22.2 percent from the previous month’s expansion of 21.7 percent. The growth of bank lending inclusive of RRPs also rose to 21.1 percent from 18.9 percent in September. Commercial banks’ loans have been growing steadily at double-digit rates since January 2011. On a month-on-month seasonally-adjusted basis, commercial banks’ lending in October grew by 0.1 percent for loans net of RRPs, while loans inclusive of RRPs increased by 1.2 percent.
Loans for production activities—which comprised 83.3 percent of commercial banks’ total loan portfolio—grew by 23.1 percent in October from 22.9 percent a month earlier. Growth in consumer loans likewise accelerated to 20.2 percent from 17.9 percent in September, reflecting the rapid growth in lending across all types of household loans.
The expansion in production loans was driven primarily by increased lending to manufacturing (which grew by 30.6 percent); real estate, renting and business services (26.1 percent); electricity, gas and water (51.0 percent); wholesale and retail trade (31.6 percent); financial intermediation (25.9 percent); transportation, storage and communication (30.9 percent); and construction (24.0 percent). Moreover, loans to mining and quarrying nearly doubled in October from a year ago, sustaining the three-digit growth rate since May 2011. Meanwhile, declines were observed in lending to three production sectors, namely, education (-10.2 percent), agriculture, hunting and forestry (-6.0 percent), and health and social work (-5.7 percent).
Robust credit growth should help buoy up the domestic economy in the midst of ongoing external headwinds. Going forward, the BSP will continue to monitor economic developments, especially liquidity expansion, to ensure that the monetary policy stance also remains supportive of domestic economic activity consistent with the price stability objective.