Bank lending up 16.8% to P4.41T in Dec

MANILA, Philippines - Bank lending growth eased in December while domestic liquidity growth picked up, the Bangko Sentral ng Pilipinas reported yesterday, noting credit remains supportive of economic growth.

Lending by universal and commercial banks less their placements with the BSP went up 16.8 percent to P4.41 trillion in December, slower than the 20.1 percent expansion in November. This is the slowest pace since the rate hit 16.4 percent in December 2013.

Together with placements with the BSP, lending rose 15.3 percent to P4.67 trillion in December, also a deceleration from the 19 percent growth a  month ago.

“The sustained and broad-based expansion in bank lending has continued to underpin the positive growth momentum of the domestic economy,” the BSP said.

BSP Governor Amando M. Tetangco Jr. said the slower credit growth may be due to effects of recent stricter regulations implemented by the central bank but stressed lending continues to support the economy.

Loans for production activities made up 90.4 percent of the total credit extended in December and BSP data showed this grew by 15.4 percent to P3.94 trillion.

The bulk of the funds went into real estate (P788.58 billion); manufacturing (P698.17 billion); wholesale and retail trade (P633.35 billion); electricity, gas and water (P460.61 billion); and financial intermediation (P384.74 billion).

Consumer loans also climbed 19.9 percent to P334.24 billion in December from a year prior, driven by a 23.2 percent increase in auto loans to P114.31 billion and a 3.1-percent rise in credit card borrowings to P161.4 billion.

Other household loans, meanwhile, ballooned 98.7 percent to P58.53 billion in December.

“Going forward, the BSP will 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 separate statement, the BSP said M3 – the broadest measure of liquidity – rew by 9.6 percent to P7.59 trillion in December, a bit faster than November’s 9.2-percent expansion.

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

Domestic claims jumped 16.2 percent to P6.96 trillion in December on the continued increase of loans extended to the private sector.

“In particular, the bulk the bank loans during the month was channeled to key production sectors such as real estate, renting, and business services, utilities, wholesale and retail trade, financial intermediation, manufacturing, and transportation, storage and communication,” the central bank said.