Bank Lending Growth Moderated in December

Preliminary data indicate that outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, expanded at a slower rate of 19.0 percent in December from 19.3 percent (revised) in November. Similarly, the growth of bank lending inclusive of RRPs decelerated to 18.1 percent in December from 18.4 percent (revised) in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending for loans net of RRPs and loans inclusive of RRPs both increased by 0.7 percent.

Loans for production activities�which comprised 88.9 percent of banks’ aggregate loan portfolio, net of RRP � grew by 18.5 percent in December as in the previous month. The growth in production loans was driven primarily by increased lending to the following sectors: real estate activities (19.3 percent); electricity, gas, steam and airconditioning supply (25.4 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (20.1 percent); manufacturing (11.7 percent); and, financial and insurance activities (16.8 percent). Bank lending to other sectors also increased during the month except in agriculture, forestry and fishing (-13.7 percent), and administrative and support services activities (-30.4 percent).

Growth in loans for household consumption slowed down to 17.2 percent in December from 20.6 percent in November. The slower increase in motor vehicle loans and salary-based general purpose loans offset the faster expansion in credit card loans and the growth in other types of household loans.

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.

Source: Bangko Sentral ng Pilipinas (BSP)

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