Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 21.1 percent in May from the previous month’s increase of 20.8 percent. Similarly, bank lending inclusive of RRPs rose at a faster pace of 19.6 percent from 19.4 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 1.3 percent for loans net of RRPs and by 0.7 percent for loans inclusive of RRPs.
Loans for production activities—which comprised about four-fifths of banks’ aggregate loan portfolio—expanded further by 19.1 percent in May from 18.9 percent in April. The expansion in production loans was driven primarily by increased lending to the following sectors: electricity, gas and water (which grew by 36.5 percent); real estate, renting, and business services (18.0 percent); wholesale and retail trade (23.1 percent); manufacturing (15.8 percent); and financial intermediation (20.2 percent). Bank lending to other sectors also rose during the month, except for mining and quarrying and public administration and defense which declined by 20.2 percent and 2.2 percent, respectively.
Similarly, loans for household consumption grew at a faster pace of 11.2 percent from 10.7 percent in the previous month, reflecting the expansion in credit card loans and auto loans.
The continued broad-based growth in bank lending suggests solid growth prospects for the domestic economy. Going forward, the BSP will take appropriate actions necessary to ensure that credit and liquidity conditions remain consistent with its price and financial stability objectives.