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Bank Lending Expands Further in December

02.13.2013

Total outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, accelerated to 16.2 percent in December from 14.0 percent in November. Bank lending inclusive of RRPs in the same month likewise grew at a faster rate of 15.4 percent from 13.3 percent in the previous month, to reach P3.5 trillion. On a month-on-month seasonally-adjusted basis, commercial bank lending in December increased by  1.6 percent for loans net of RRPs while loans inclusive of RRPs rose by 1.6 percent as well.

Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—grew at a brisker pace of 16.6 percent in December from  14.6 percent in November. Similarly, the growth in consumer loans increased to 14.1 percent from 12.1 percent in the previous month, due mainly to the expansion of credit card receivables and auto loans, which grew by 13.4 percent and 14.0 percent, respectively.

The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (29.7 percent); financial intermediation (38.5 percent); wholesale and retail trade (17.7 percent); transportation, storage, and communication (37.5 percent); and manufacturing (9.3 percent). Meanwhile, declines were observed in lending to mining and quarrying (-44.0 percent) and agriculture, hunting, and forestry (-25.5 percent).

The continued growth in bank lending, particularly to the productive sectors, is expected to support the growth momentum of the economy. Going forward, the BSP will continue to monitor the financial system to ensure that liquidity conditions are supportive of economic growth while remaining consistent with its price stability objective.

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