Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slightly faster rate of 19.6 percent in July from 19.1 percent in June. Likewise, the growth in bank lending inclusive of RRPs increased more rapidly at 18.7 percent in July from 17.7 percent (revised) in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRPs and loans inclusive of RRPs increased by 1.9 percent and 2.4 percent, respectively.
Loans for production activities—which comprised 88.6 percent of banks’ aggregate loan portfolio, net of RRP — increased slightly by 19.7 percent in July from 19.2 percent in the previous month. The growth in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade, repair of motor vehicles and motorcycles (25.6 percent); financial and insurance activities (35.9 percent); real estate activities (15.9 percent); manufacturing (19.0 percent); electricity, gas, steam and airconditioning supply (9.7 percent); and, construction (37.6 percent). Bank lending to other sectors also increased during the month except in agriculture, forestry and fishing (-7.1 percent), and administrative and support services activities (-52.1 percent).
Meanwhile, the growth of loans for household consumption decelerated to 16.9 percent in July from 17.8 percent (revised) in the previous month. The contraction in salary-based general purpose consumption loans and other types of household loans, as well as the slower growth in motor vehicle loans offset the faster expansion in credit card loans in July.
The BSP will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives.