Bank lending growth accelerates further in May

MANILA, Philippines - Bank lending expansion accelerated in May as more corporate and retail borrowers continued to take advantage of low interest rates, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Amando Tetangco Jr. said outstanding loans of commercial banks grew faster at 17.7 percent in May from 15.6 percent in April on the back of higher growth for production activities and household consumption.

Data showed loans extended by big banks reached P5.62 trillion as of end-May from P4.52 trillion in end-May last year.

Tetangco said loans for production activities jumped 17.9 percent to P4.76 trillion from P4.04 trillion and accounted for 89.4 percent of the bank’s total loan portfolio in end-May.

Loans to real estate activities jumped 22.3 percent to P936.94 billion and accounted for 17.6 percent of the total loan portfolio, while lending to the manufacturing sector went up 5.9 percent to P762.33 billion for a 14.3 percent share.

Loans to the wholesale and retail trade as well as repair of motor vehicles and motorcycles jumped 18.3 percent to P757.58 billion for a 14.2 percent share while lending to electricity, gas, steam and airconditioning supply surged 29.3 percent to P604.03 billion for an 11.3 percent share.

The BSP chief also reported loans for household consumption expanded 17.4 percent to P414.59 billion in end-May from P353.16 billion in end-May last year.

Motor vehicle loans zoomed 35.5 percent to P173.17 billion from P127.78 billion while credit card loans went up eight percent to P177.74 billion from P164.51 billion.

Salary-based general consumption loans jumped 40.6 percent to P48.17 billion from P34.26 billion.

The country’s gross domestic product (GDP) growth accelerated to 6.9 percent in the first quarter from the revised 6.5 percent in the fourth quarter of last year amid robust spending and strong investments.

Economic managers penned a GDP growth of between 6.8 and 7.8 percent this year after slowing down to 5.9 percent last year from 6.1 percent in 2014 due to weak global growth and lack of government spending.

“Going forward, the BSP will continue to ensure that domestic credit and liquidity conditions will keep pace with overall economic growth while remaining consistent with its price and financial stability objectives,” Tetangco said.