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Bank Lending Decelerates in February


The growth of outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, decelerated to 15.2 percent in February from 17.3 percent in January. Similarly, bank lending inclusive of RRPs grew at a slower pace of 14.6 percent in February from 16.6 percent in the previous month.  On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 0.5 percent for loans net of RRPs and by 0.2 percent for loans inclusive of RRPs.

Loans for production activities—which comprised more than 80.0 percent of banks’ aggregate loan portfolio—expanded albeit at a slower rate of 14.5 percent in February from 16.0 percent in January. While double-digit growth has continued in most major segments such as manufacturing, the pace of credit growth to production activities has moderated for some subsectors, particularly real estate, renting and business services. Since 2012, the BSP has introduced pre-emptive macroprudential policy measures to ensure the banking industry’s continuous healthy exposure to real estate development. The stronger expansion in loans to manufacturing (15.0 percent) was offset by slower credit growth to the following sectors: wholesale and retail trade (16.1 percent); real estate, renting, and business services (10.6 percent); electricity, gas and water (14.3 percent); financial intermediation (16.0 percent); and transportation, communication and storage (15.5 percent). Nevertheless, bank lending to other sectors increased during the month except for public administration and defense, which declined by 2.8 percent.

Loans for household consumption expanded by 21.1 percent in February from 20.5 percent in January due to faster growth in credit card and auto loans as well as sustained growth in other types of loans (i.e., salary loans and personal loans).

Going forward, the BSP will continue to ensure that credit and liquidity conditions remain supportive of overall economic growth in a manner consistent with the BSP's price and financial stability objectives.

View Tables:  PSIC 2009  |  PSIC 1994

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