Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, expanded at a slower pace of 14.0 percent in November relative to the growth of 15.8 percent in October. Growth in bank lending inclusive of RRPs in the same month likewise decelerated to 13.3 percent from 14.2 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 November increased by 0.5 percent for loans net of RRPs while loans inclusive of RRPs fell by 0.1 percent.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—grew by 14.6 percent in November from 16.4 percent in the previous month. Similarly, the growth of consumer loans eased to 12.1 percent from 13.9 percent in October, reflecting the slowdown across all types of household loans.
The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (24.8 percent); wholesale and retail trade (by 26.9 percent); financial intermediation (37.3 percent); manufacturing (13.6 percent); transportation, storage, and communication (26.5 percent); and public administration and defense (48.9 percent). Meanwhile, declines were observed in lending to mining and quarrying (-39.5 percent) and agriculture, hunting, and forestry (-41.8 percent).
The growth in bank lending, especially to productive activities, should provide needed resources to raise the growth potential of the economy. Given strong demand and ample liquidity in the economy, bank lending is expected to continue to expand. Going forward, the BSP will continue to closely track economic and financial developments to ensure that credit conditions are supportive of sustained domestic economic growth while remaining consistent with the BSP’s price stability objective.