Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, expanded by 19.4 percent in February from the previous month’s growth of 17.1 percent. Similarly, bank lending inclusive of RRPs grew by 18.0 percent from 15.9 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 2.5 percent for loans net of RRPs and by 1.8 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio— expanded further by 17.8 percent in February from 16.2 percent in January. The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (which grew by 20.2 percent); electricity, gas and water (34.8 percent); wholesale and retail trade (18.9 percent); manufacturing (11.3 percent); and financial intermediation (14.5 percent). All the other sectors posted positive growth rates during the month except lending to public administration and defense which declined by 1.7 percent.
Similarly, loans for household consumption grew at a faster pace of 9.2 percent from 8.9 percent in the previous month due to the expansion of auto loans and other types of loans (i.e., personal loans and salary loans).
With the recent policy measure to adjust the reserve requirement of banks, the growth in bank lending activity is expected to move toward its long-run trend consistent with the pace of expansion in the real sector. Going forward, the BSP will continue to closely monitor credit and liquidity conditions to ensure that bank lending growth continues to reflect the pace of domestic demand while at the same time maintaining price and financial stability.