PH banks’ lending expands by 15.8% in January

MANILA, Philippines – Local commercial banks are continuing to expand their credit lines driven by loans for household consumption and real estate activity, based on the latest data by the Bangko Sentral ng Pilipinas (BSP).

Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, expanded by 15.8% in January from the revised figure of 13.6% in December, the BSP said in a statement released on Monday, February 29.

Similarly, bank lending inclusive of RRPs increased by 15.6% in January from the revised 12.7% figure in the previous month.

This means that on a month-on-month seasonally-adjusted basis, commercial bank lending increased by 1.5% for loans net of RRPs and by 1.8% for loans inclusive of RRPs.

Loans for production activities – which comprised more than 80.0% of banks’ aggregate loan portfolio – grew by 16.0% in January from 13.7% (revised) in December.

The expansion in production loans was driven primarily by increased lending to the following sectors: real estate activities (23.4%); electricity, gas, steam and air-conditioning supply (35.7%); wholesale and retail trade, repair of motor vehicles and motorcycles (13.7%); manufacturing (5.5%); and information and communication (27.3%).

Bank lending to other sectors likewise expanded during the month except for other community, social and personal activities, which declined by 7.2%.

Loans for household consumption increased by 16.3% in January from 15.1% (revised) in December due to the expansion of credit card loans and auto loans as well as sustained expansion in salary-based general purpose loans.

Late last year, credit rating agency Moody’s Investor Service gave Philippine banks a “stable outlook” and predicted that the credit expansion of Philippine banks is expected to remain brisk at 14% to 16% over the next 12 to 18 months, from 19% in 2014. – Rappler.com