BANK lending growth finally breached the double-digit level in July as total loans outstanding reached P2.156 trillion or 11.7 percent higher than a year ago.
The Bangko Sentral ng Pilipinas (BSP) bared the accelerated growth seven months after it last reported on double-digit bank lending activities in December when this grew by 10 percent flat.
Bank lending quickly slowed in subsequent months and has struggled to gain speed in a period when entrepreneurs have sources of financing other than their good old reliable banker on Ayala Ave.
BSP Gov. Amando M. Tetangco Jr. said entrepreneurs tap the local equities market for funds more often than previous or sell debt papers to investment-hungry entities such as insurance companies, investment banks and others whose investment horizon extend beyond 10, 20 or more years.
“Outstanding loans of commercial banks, net of banks’ reverse repurchase placements with the BSP, grew at a faster pace of 11.7 percent in July compared to the previous month’s expansion of 9.6 percent,” Tetangco said.
“The growth of bank lending, inclusive of reverse repurchase papers or RRPs, also accelerated by 8.9 percent from 5.5 percent in June, to reach P2.3 trillion,” he added.
“On a month-on-month seasonally-adjusted basis, commercial banks’ lending in July rose by 0.2 percent for loans net of RRPs, but declined by 0.2 percent for loans inclusive of RRPs,” Tetangco reported on Tuesday.
The bulk or 85.5 percent of the loans, he said, were for production activities, its volume accelerating further to 12 percent in July from 9.3 percent in June.
Credit card, auto loans and other loans lumped under consumption loans slowed a bit to 12.5 percent from 13 percent.
“The growth in bank lending, especially to productive activities, is in line with the ongoing overall expansion in domestic economic activity. The BSP believes that given the strong demand and ample liquidity in the economy, bank lending will continue to rise. Going forward, we will continue to monitor unfolding economic and financial developments to ensure monetary conditions remain conducive to growth while at the same time consistent with our price stability objective,” Tetangco said.
