Banks lend more to productive activities, less to BSP

MANILA, Philippines – Outstanding loans extended by universal and commercial banks increased 13.1% to P3.261 trillion in May.

Including the banks’ reverse repurchase placements (RRP) or money lent to the Bangko Sentral ng Pilipinas (BSP), gross outstanding loans in the first 5 months of 2013 reached P3.523 trillion.

These indicators showed a faster pace of growth for the loans exclusive of the RRPs against the 12% recorded in April. Loans inclusive of RRPs, on the other hand, decelerated from 13.7% in April.

The BSP has been reducing its borrowing windows to encourage banks to focus on funding productive activities, thus contribute to the economy’s growth.

“The continued brisk growth in bank lending suggests adequate funding for domestic activity in the months ahead. Going forward, the BSP will continue to monitor the domestic financial environment to ensure that liquidity and credit conditions remain supportive of the expanding domestic economy while remaining consistent with its price stability objective,” the BSP said in a statement on Friday, June 28.

Consumer loans increased by 11.7% to P263.24 million. Below is the breakdown: 

• Credit card: P147.46 billion, up 9%
• Auto loans: P87.8 billion, up 16.7%
• Others: P27.96 billion, up 11.1%

Loans for productive activities accounted for four-fifths of the total loan portfolio and accelerated to 13.3% from 12% in April.

Expansion in loans to productive activities were driven mainly by increased lending to the following sectors:

• Mining and quarrying, up 70.7% to P26 billion
• Construction, 51.2% to P64.34 billion
• Health and social work, up 50.3% to P17.6 billion
• Real estate, renting and business services, up 24.3% to P603.87 billion
• Hotels and restaurants, up 20.4% to P47.6 billion
• Wholesale and retail trade, up 13% to P464.64 billion 
• Other community, social and personal services, up 17% to P79.85 billion
• Electricity gas and water, 14.8% to P304 billion
• Public administration and defense, up 14% to P107 billion
• Financial intermediation, up 13% to P275 billion
• Transportation, storage and communication, up 8.8% to P248.37 billion
• Manufacturing, up 5.2% to P544 billion
• Education, up 4.2% to P11.8 billion

The following sectors saw a decline in funds lent:

• Agriculture, hunting and forestry, down 6.5% to P167.47 billion 
• Fishing, down 3.6% to P6.97 billion

– Rappler.com