Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a faster rate of 21.8 percent in July from the previous month’s increase of 20.1 percent. Similarly, bank lending inclusive of RRPs expanded by 20.4 percent, up from the 18.7 percent growth in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 2.7 percent for loans net of RRPs and by 2.1 percent for loans inclusive of RRPs.
Loans for production activities—which comprised about four-fifths of banks’ aggregate loan portfolio—expanded further by 20.9 percent in July from 17.7 percent in June. The expansion in production loans was driven primarily by increased lending to the following sectors: real estate, renting, and business services (16.8 percent); wholesale and retail trade (21.4 percent); manufacturing (16.8 percent); electricity, gas and water (26.3 percent); and financial intermediation (27.8 percent). Bank lending to other sectors also rose during the month except for public administration and defense, which declined by 2.3 percent.
Loans for household consumption grew at a steady rate of 16.0 percent, reflecting the continued expansion in auto loans and other types of loans (i.e. salary loans and personal loans) which offset the slight slowdown in the growth of credit card loans.
The continued expansion in bank lending suggests that the momentum of domestic economic activity remains strong. Going forward, the BSP will continue to ensure that credit and liquidity conditions will keep at pace with economic growth while remaining consistent with its price stability objective.