Outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, expanded at a faster pace of 13.1 percent in May relative to the 12.0 percent growth registered in April. Meanwhile, growth of bank lending inclusive of RRPs in the same month decelerated to 13.1 percent from 13.7 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending in May increased by 0.6 percent for loans net of RRPs but loans inclusive of RRPs dropped by 0.2 percent.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—accelerated to 13.3 percent in May from 12.0 percent in April. Likewise, the growth in consumer loans in the same month rose slightly to 11.7 percent from 11.5 percent a month earlier due to the sustained expansion 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 (24.3 percent); wholesale and retail trade (13.0 percent); electricity, gas and water (14.8 percent); financial intermediation (13.0 percent); and manufacturing (5.2 percent). Meanwhile, declines were observed in lending to agriculture, hunting, and forestry (-6.5 percent) and fishing (-3.6 percent).
The continued brisk growth in bank lending suggests adequate funding for domestic economic activity in the months ahead. Going forward, the BSP will continue to monitor the domestic financial environment to ensure that liquidity and credit conditions remain supportive of the expanding domestic economy while remaining consistent with its price stability objective.