Bank lending grows 19% to P6.22 T

MANILA, Philippines - Bank lending grew 19.2 percent in end-April despite the weaker-than-expected economic growth in the first quarter, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Amando Tetangco Jr. said preliminary data showed bank loans amounted to P6.22 trillion in end-April, P1 trillion higher than the P5.22 trillion booked in end-April last year.

The credit growth in April was slower than the 20.2 percent loan expansion recorded in end March this year.

“Going forward, the BSP will continue to ensure the expansion in domestic credit and liquidity conditions proceed in line with overall economic growth while consistent with the BSP’s price and financial stability objectives,” he said.

Economic managers penned a GDP growth of between 6.5 and 7.5 percent this year as election-related spending boosted the expansion to 6.9 percent last year from 5.9 percent in 2015.

However, the BSP said strong demand for funds to bankroll the expansion program of corporate and individual borrowers continued to boost bank lending in the first four months.

Statistics showed lending for production activities rose 18.4 percent to P5.51 trillion in end-April from P4.66 trillion in end-April last year. This accounted for 88.7 percent of the loans disbursed by Philippine banks.

“The growth in production loans was driven primarily by increased lending to real estate activities, manufacturing and others. Bank lending to other sectors also increased during the month,” he said.

Loans to real estate activities surged 19 percent to P1.09 trillion while lending to the manufacturing sector rose 16.5 percent to P867.01 billion for a 13.9 percent share.

Lending to the wholesale and retail trade as well as repair of motor vehicles and motorcycles grew 12.3 percent to P833.12 billion while lending to electricity, gas, steam and airconditioning supply expanded by 20 percent to P715.15 billion for an 11.5 percent share.

The outgoing BSP chief also added loans for household consumption jumped 24.3 to P503.84 billion in end-April this year from P405.48 billion in end-April last year.

Motor vehicle loans zoomed 31.5 percent to P221.34 billion while credit card loans booked a double-digit growth of 12.9 percent to P202.24 billion. Salary-based general consumption loans jumped 41.3 percent to P66.78 billion.

Earlier, Tetangco told The STAR there is no excessive liquidity and credit growth in the country that could create financial stability concerns and overheating for the economy.

The outgoing BSP chief said the expansion of both money supply also known as liquidity in the financial system and bank loans remain within credible thresholds.