Bank loans grow 13.5% to P4.6 T

MANILA, Philippines - The growth in bank lending slowed down in July on the back of lower borrowings from both corporate and individual clients, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Outstanding loans of commercial banks expanded 13.5 percent to P4.597 trillion in July this year from P4.05 trillion in July last year.

The expansion is lower compared to the 14.5 percent growth in bank lending in June.

Together with reverse repurchase placements with the BSP, lending rose 13.4 percent to P4.886 trillion in July from a year-ago level of P4.31 trillion.

The BSP traced the decline to the slowdown in bank loans for production activities that accounted for a little over 90 percent of the total bank lending as well as for household consumption that cornered a share of 7.7 percent.

The growth of loans for production declined to 13.4 percent in July from a growth rate of 14.5 percent in June. Loans extended to production activities reached P4.1 trillion in July from P3.62 trillion in the same month last year.

The expansion in production loans was driven primarily by 16.4 percent increase in lending to the real estate sector; 27.8 percent growth in electricity, gas, steam and airconditioning supply; 15.2 percent for wholesale and retail trade, and repair of motor vehicles and motorcycles; 10.7 percent for financial and insurance activities; and 4.5 percent for the manufacturing sector.

Bank lending for transportation and storage declined 4.5 percent while loans for other community, social and personal activities fell 15.1 percent.

Loans for real estate activities amounted to P797.67 billion in end July followed by manufacturing with P697.83 billion; wholesale and retail trade with P652.6 billion; electricity, gas and water with P482.1 billion; and financial intermediation activities with P396.54 billion.

The BSP said the growth for loans for household consumption also eased to 13.7 percent in July from 14.9 percent in June. Bank lending for household consumption amounted to P355.41 billion in July from P312.59 billion in the same month last year.

Loans for household consumption include credit card loans, auto loans, and salary loans.

“The BSP will continue to ensure that domestic credit and liquidity conditions will keep pace with overall economic growth while remaining consistent with its price and financial stability objectives,” the BSP said.

In the latest Senior Loan Officers Survey of the BSP, the credit standards for loans to households and enterprises by banks were unchanged in the second quarter after a net tightening in the first quarter.