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Bank Lending Sustains Growth in April

05.30.2014

Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 20.9 percent in April from the previous month’s increase of 20.0 percent. Similarly, bank lending inclusive of RRPs rose at a faster pace of 19.4 percent from 18.3 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 1.1 percent for loans net of RRPs and by 1.3 percent for loans inclusive of RRPs.

Loans for production activities—which comprised about four-fifths of banks’ aggregate loan portfolio—expanded further by 18.9 percent in April from 18.1 percent in March. The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (which grew by 20.0 percent); electricity, gas and water  (32.6 percent); wholesale and retail trade (21.3 percent); manufacturing (16.2 percent); and financial intermediation (15.3 percent). Bank lending to other sectors also posted positive growth rates during the month, except for public administration and defense which declined by   1.2 percent.

Loans for household consumption, on the other hand, grew at a slower pace of  10.7 percent from 11.7 percent in the previous month reflecting the slowdown in credit card loans and auto loans.

The continued expansion in bank lending across sectors is expected to support the growth momentum of the economy. Going forward, the BSP will continue to closely monitor credit and liquidity conditions and deploy appropriate measures as necessary to ensure that the monetary environment remains consistent with its price and financial stability objectives.

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