MANILA, Philippines - Bank lending picked up in October on the back of a strong growth in real estate loans as well as the recovery in the manufacturing sector, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend.
Data showed that outstanding loans of commercial banks expanded 13.9 percent to P4.82 trillion in end-October from P4.24 trillion in end-October last year.
The expansion in October was faster compared to the revised 12.6 percent growth in bank lending booked in September.
Together with reverse repurchase placements with the BSP, lending rose 14.2 percent to P5.12 trillion in October from a year-ago level of P4.24 trillion.
Data revealed a 14.4 percent growth in loans for production activities to P4.31 trillion in October from P3.77 trillion in the same month last year. Production activities accounted for 89.4 percent of the total loan portfolio of the banking system.
The BSP said real estate loans jumped 22.4 percent to P842.93 billion from P688.5 billion and got the biggest share with 17.5 percent.
In the latest Senior Loan Officers Survey of the BSP, banks imposed tighter credit standards for loans to commercial real estate for the 13th straight quarter.
The survey showed about 86.4 percent of the respondent banks indicated unchanged overall credit standards for commercial real estate loans using the modal approach.
However, based on the diffusion index approach, a net tightening of overall credit standards was noted for commercial real estate loans in the third quarter.
The BSP stepped up its watch over the real estate sector as early as 2012 by ordering banks to disclose more comprehensive reports on their exposures to the property industry.
On the other hand, loans extended to manufacturing companies inched up three percent in October after contracting by 2.2 percent in September. Loans amounted to P734.89 billion from P713.57 billion and cornered a share of 15.2 percent.
This was followed by the wholesale and retail trade as well as repair of motor vehicles and motorcycles that went up 13.7 percent to P686.69 billion from P603.75 billion and accounted for 14.2 percent of the total loans.
The BSP said lending for household consumption, including credit card loans, auto loans, and salary inched up 12.8 percent in October from 12.7 percent in September.
Bank lending for household consumption amounted to P367.89 billion in October from P326.14 billion in the same month last year.
Credit card loans went up 6.8 percent to P167.77billion while auto loans jumped 29.5 percent to P144.62 billion.