Bank lending up 20.5% in September

MANILA, Philippines - Bank lending grew at a faster pace in September as more borrowings were extended for production activities that support the domestic economy, the Bangko Sentral ng Pilipinas reported yesterday.

Lending by universal and commercial banks less their placements with the BSP increased by 20.5 percent to P4.21 trillion in September. The growth rate was faster than the 20.1 percent recorded in August.

Together with placements with the central bank, lending went up 19.5 percent to P4.48 trillion in September, an acceleration from the 18.6-percent expansion recorded in the previous month.

Loans for production activities – which made up 90.4 percent of the total loan portfolio – rose 18.7 percent to P3.74 trillion from year-ago levels.

The bulk of the funds went into real estate (P748.92 billion); manufacturing (P663.05 billion); wholesale and retail trade (P601.5 billion); electricity, gas and water (P437.44 billion); and financial intermediation (P370.52 billion).

At the same time, consumer loans also climbed 17.7 percent to P320.81 billion in September from a year ago.

Credit card loans grew 3.2 percent to P156.02

billion, while auto loans jumped 18.4 percent to P108.16 billion. Other consumer loans including salary loans and personal loans ballooned by 88.7 percent to P56.63 billion.

“Going forward, the BSP will continue to ensure that domestic credit and liquidity conditions will remain supportive of economic growth while remaining consistent with its price stability objective,” the central bank said.

Earlier this month, the BSP issued a new regulation to strengthen banks’ credit risk management which includes keeping a focus on borrowers’ cash-flow analysis and ability to pay.

Banks were ordered to develop internal risk rating systems and stress testing policies to better assess their credit risk exposures. The new rules also encourage lending to small firms as borrowers will be exempted from some documentary requirements.