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Bank Lending Grew at a Decelerated Pace in August

09.30.2014

Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slower rate of 20.2 percent in August from the previous month’s increase of 21.1 percent (revised). Similarly, the growth of bank lending inclusive of RRPs decelerated to 17.9 percent from the 19.7 percent (revised) 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 0.2 percent for loans inclusive of RRPs.

Loans for production activities—which comprised about four-fifths of banks’ aggregate loan portfolio—expanded by 19.1 percent in August from 20.0 percent (revised) in July. The expansion in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade (23.5 percent); real estate, renting, and business services (16.8 percent); electricity, gas and water (25.7 percent); financial intermediation (27.0 percent); and, manufacturing (13.1 percent). Bank lending to other sectors also rose during the month except for public administration and defense, which declined by 3.1 percent.

Loans for household consumption grew by 16.6 percent in August from 16.2 percent (revised) in July, primarily due to 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 sustained expansion of bank lending reflects the buoyant growth the economy. Going forward, the BSP will remain watchful that domestic credit and liquidity conditions will remain supportive of economic activity growth while remaining consistent with its price stability objective.

View Table 1 (PSIC 1994) | Table 2 (PSIC 2009)

 

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