Bank lending grew at a slower pace in January, averaging only 17.3 percent, essentially a validation of the slowdown in so-called productive loans during the period.
The Bangko Sentral ng Pilipinas (BSP) said the outstanding loans of commercial banks slowed to only 17.3 percent during the month, significantly down from the revised 19.9-percent bank loan growth reported
last December.
Still, the BSP said the funds the banks deployed in January proved sufficient for the country’s growing economy.
“The sustained expansion in bank lending amid adequate liquidity continues to provide a meaningful boost to domestic economic activity,” the central bank said.
Bank lending growth during the period was driven for the most part by loans extended to the productive sectors. These loans, the central bank said, accounted for 80 percent or four-fifths of the industry’s total loan portfolio.
The other fifth, meanwhile, were loans for household consumption.
Production loans expanded by 16 percent in January. This represented a slowdown from the previous month’s
18.7 percent.
Production-loan growth was driven primarily by increased lending to real estate, renting and business services, which grew by 15.4 percent; the wholesale and retail trade, at 17.7 percent; manufacturing, at 12.8 percent; electricity; gas and water, at 18.5 percent; financial intermediation, at 18.8 percent; and transportation, storage and communication, at 19 percent.
Lending to other sectors similarly rose for the period with the exception of public administration and defense, which contracted by 3.2 percent, while other community, social and personal services loans declined by 2.5 percent.
Loans for household consumption grew by 20.5 percent in January, also slower from the 21.1 percent seen in December last year.
This was due to the sustained growth in credit card and auto loans, which offset the slowdown in other types of loans.
“Going forward, the BSP will ensure that credit and liquidity conditions remain supportive of overall economic growth in a manner consistent with the BSP’s price and financial-stability objectives,” the BSP said.