Philippine Bank Lending Slows in March – BSP

MANILA, PHILIPPINES – Bank lending in the Philippines slowed down in March from a month ago, posting a growth of just 13.7 percent from February’s 15.2 percent rise, the Bangko Sentral ng Pilipinas (BSP) said.

Data released by the central bank showed that outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, rose by 13.7 percent in March, slower than the 15.2 percent growth recorded in February.

Similarly, bank lending inclusive of RRPs grew by 13.2 percent in March from 14.6 percent in the previous month.

Bangko Sentral ng Pilipinas
Bangko Sentral ng Pilipinas

On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 0.1 percent for loans net of RRPs and by 0.2 percent for loans inclusive of RRPs.

Loans for production activities, which included more than 80.0 percent of banks’ aggregate loan portfolio, went up by 13.3 percent in March from 14.5 percent in February.

The growth in production loans was driven primarily by lending to the following sectors: real estate, renting, and business services (10.1 percent); manufacturing (11.4 percent); wholesale and retail trade (12.6 percent); electricity, gas and water (14.2 percent); and financial intermediation (19.3 percent).

“Bank lending to other sectors also increased during the month except for public administration and defense, which declined by 2.3 percent,” the BSP said.

Loans for household consumption expanded by 18.8 percent in March from 21.1 percent in February amid continued growth in credit card loans, auto loans and other types of loans (i.e., salary loans and personal loans).

“Going forward, the BSP will continue to 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 central bank said in a statement posted on its website.

Domestic Liquidity Growth Accelerates in March

Meanwhile, preliminary data show that domestic liquidity (M3) grew by 9.4 percent year-on-year in March 2015 to reach P7.7 trillion.

This was faster than the 8.5-percent expansion recorded in February. On a month-on-month seasonally-adjusted basis, M3 increased by 2.1 percent.

“Money supply continued to increase due largely to sustained demand for credit,” the BSP said.

Domestic claims grew by 10.4 percent in March from 10.0 percent in February as credits to the private sector expanded at a slightly faster pace relative to the previous month.

The bulk of bank loans during the month was channeled to key production sectors such as real estate, renting, and business services, manufacturing, wholesale and retail trade, financial intermediation, and utilities.

Meanwhile, net public sector credit contracted by 6.5 percent in March after declining by 4.5 percent a month earlier. – BusinessNewsAsia.com

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