Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, continued to expand in June at a slightly faster pace of 14.9 percent relative to the previous month’s growth of 14.7 percent. However, bank lending inclusive of RRPs grew at a slower rate of 12.2 percent from 13.6 percent in May. Commercial bank loans have been growing at double-digit rates since January 2011. On a month-on-month seasonally-adjusted basis, commercial bank lending in June increased by 1.9 percent for loans net of RRPs and by 0.2 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—grew by 15.1 percent in June from 14.7 percent a month earlier. Meanwhile, the growth of consumer loans eased to 15.8 percent from 16.8 percent in May due mainly to the slowdown in credit card receivables and other consumer loans.
The expansion in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade (by 42.4 percent); real estate, renting, and business services (27.1 percent); manufacturing (25.1 percent); financial intermediation (24.4 percent); and transportation, storage, and communication (31.2 percent). Meanwhile, declines were observed in lending to mining and quarrying (-28.1 percent) and agriculture, hunting, and forestry (-45.3 percent).
The continued growth in bank lending underpins the BSP’s view that domestic demand remains firm and would lend support to the economy amid weakening global economic conditions. The BSP will continue to monitor liquidity conditions to ensure that credit activity remains supportive of overall economic growth while remaining consistent with the BSP’s price stability objective.