Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 20.0 percent in March from the previous month’s increase of 19.4 percent. Similarly, bank lending inclusive of RRPs rose at a slightly faster pace of 18.3 percent from 18.0 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 1.5 percent for loans net of RRPs and by 1.9 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—expanded further by 18.1 percent in March from 17.8 percent in February. The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (which grew by 19.7 percent); electricity, gas and water (34.9 percent); wholesale and retail trade (22.1 percent); manufacturing (14.1 percent); and financial intermediation (10.5 percent). All other sectors posted positive growth rates during the month except lending to public administration and defense which declined by 1.3 percent.
Similarly, loans for household consumption grew at a faster pace of 11.7 percent from 9.3 percent in the previous month due to the expansion of credit card loans and other types of loans (i.e., personal loans and salary loans).
The sustained growth in bank lending reflects robust domestic demand. Going forward, the BSP will continue to closely monitor credit and liquidity conditions to ensure that bank lending moves in tandem with the pace of economic activity while at the same time maintaining price and financial stability.