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Bank Lending Rises Anew in April

06.08.2012

The growth of outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, rose in April to 19.2 percent from the previous month’s expansion of 18.7 percent. Meanwhile, the growth of bank lending inclusive of RRPs increased at a slower pace of 16.0 percent from 17.7 percent in March. 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 April rose by 1.9 percent for loans net of RRPs and 0.9 percent for loans inclusive of RRPs.

Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—grew by 19.7 percent in April from 19.3 percent a month earlier. The growth of consumer loans, however, declined to 17.5 percent from 18.5 percent in the previous month due mainly to the slowdown in auto loans.

The expansion in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade (by 57.6 percent); manufacturing (29.4 percent); real estate, renting, and business services (25.8 percent); financial intermediation (42.0 percent); electricity, gas, and water (25.1 percent); transportation, storage, and communication (26.8 percent); public administration and defense (42.5 percent); and construction (45.3 percent). Meanwhile, declines were observed in lending to mining and quarrying (-30.8 percent) and agriculture, hunting, and forestry (-47.6 percent).

Given the economy’s robust growth in the first quarter, bank lending could be expected to remain strong in the months ahead, thereby providing support to real sector activity. The BSP will continue to ensure that liquidity and credit conditions keep at pace with overall economic activity while remaining consistent with the BSP’s price stability objective.

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