Outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, expanded albeit at a slower pace of 12.3 percent in June relative to the 13.3 percent (revised) growth registered in May. Similarly, the growth of bank lending inclusive of RRPs in the same month decelerated to 13.0 percent from 13.2 percent (revised) in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending in June increased by 0.8 percent for loans net of RRPs and by 0.4 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—grew by 12.2 percent in June from 13.5 percent (revised) in May. The growth in consumer loans in the same month also eased slightly to 12.1 percent from 12.2 percent (revised) a month earlier due to the slowdown in credit card receivables and other household loans.
The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (which grew by 22.3 percent); wholesale and retail trade (15.7 percent); manufacturing (8.1 percent); electricity, gas and water (13.8 percent); and construction (48.7 percent). Meanwhile, lending to agriculture, hunting, and forestry continued to decline in June (by 11.5 percent).
The expansion of domestic economic activity and stable financial conditions supported the sustained growth in bank lending in June. Going forward, the BSP will continue to ensure that liquidity and credit conditions remain appropriately supportive of the expanding domestic economy while remaining consistent with its price stability objective.