Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, expanded in July at a faster pace of 16.0 percent relative to the growth of 14.9 percent in June. Bank lending inclusive of RRPs likewise recorded a higher rate of 15.2 percent from 12.2 percent in the previous month. 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 July increased by 2.0 percent for loans net of RRPs and by 5.0 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—increased by 16.4 percent in July from 15.1 percent a month earlier. Meanwhile, the growth of consumer loans eased slightly to 15.4 percent from 15.8 percent in June 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 48.7 percent); manufacturing (25.1 percent); real estate, renting, and business services (24.7 percent); financial intermediation (31.7 percent); and transportation, storage, and communication (26.9 percent). Meanwhile, declines were observed in lending to mining and quarrying (-43.9 percent) and agriculture, hunting, and forestry (-44.3 percent).
Bank lending is expected to remain strong in the coming months, thereby providing support to domestic demand and real sector activity going forward. 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.