Bank Lending Growth Eases in January

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) show that outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slower rate of 15.3% in January from the 15.7% (revised) in December. Likewise, the growth in bank lending inclusive of RRPs decelerated to 14.4% in January from 14.8% (revised) in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRPs and inclusive of RRPs both increased by 0.9%.

Loans for production activities—which comprised 88.6% of banks’ aggregate loan portfolio, net of RRP — increased at a slower pace of 15.5% in January from 15.8% 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 (16.5%); financial and insurance activities (26.5%); manufacturing (14.8%); real estate activities (10.7%); electricity, gas, steam and airconditioning supply (11.9%); and, construction (45.8%). Bank lending to other sectors also increased during the month except that in professional, scientific and technical activities which contracted by 13.2%.

Similarly, the growth of loans for household consumption was lower in January at 12.7% relative to the 13.6% (revised) growth in December. The deceleration in credit card loans and motor vehicle loans as well as the contraction in salary-based general purpose consumption loans offset the expansion in other types of household loans during the month.

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.

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