Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, continue to expand in August but at a slower pace of 14.0 percent relative to the growth of 16.0 percent in July. Bank lending inclusive of RRPs likewise recorded a slower growth rate of 12.4 percent from 15.2 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 August increased by 0.1 percent for loans net of RRPs but decreased by 0.2 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—increased by 14.1 percent in August from 16.4 percent a month earlier. Meanwhile, the growth of consumer loans rose slightly to 15.8 percent from 15.4 percent in July due mainly to the increase in auto loans and other consumer loans.
The expansion in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade (by 38.0 percent); real estate, renting, and business services (24.7 percent); manufacturing (18.2 percent); financial intermediation (26.7 percent); transportation, storage, and communication (28.9 percent); and electricity, gas, and water (15.9 percent). Meanwhile, declines were observed in lending to mining and quarrying (-45.5 percent) and agriculture, hunting, and forestry (-43.9 percent).
Bank lending activity is expected to remain robust, thereby providing support to domestic demand and real sector activity in the coming months. 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.