Bank loans up 19% to P6.43 T in June

MANILA, Philippines - Bank credit grew faster at 19 percent in end-June due to higher disbursements to the real estate and manufacturing sectors, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Nestor Espenilla Jr. said preliminary data showed bank loans amounted to P6.43 trillion in end-June, P1.11 trillion higher than the P5.41 trillion recorded in end-June last year.

The credit growth in June was faster than the 18.7 percent loan expansion recorded in end-May as the strong demand for funds to bankroll the expansion program of corporate and individual borrowers continued to boost bank lending.

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

Data showed lending for production activities went up 17.9 percent to P5.69 trillion in end-June from P4.83 trillion in end-June last year. This accounted for 88.5 percent of the loans disbursed by the local banks.

The BSP said credit extended to the real estate sector rose 17.8 percent to P1.12 trillion for a 17.4 percent of the total loan portfolio while lending to the manufacturing sector increased 11.6 percent to P865.84 billion for a 13.5 percent share.

Loans disbursed to the wholesale and retail trade as well as repair of motor vehicles and motorcycles increased 11.6 percent to P845.04 billion for a 13.1 percent share while credit extended to electricity, gas, steam and airconditioning supply rose 24.9 percent to P773.48 billion for a 12 percent share.

Espenilla said loans for household consumption surged 22.5 percent to P519.28 billion in end-June from P423.78 billion in end-June last year.

Motor vehicle loans zoomed 28.5 percent to P230.32 billion while credit card loans grew 17 percent to P208.88 billion. Salary-based general consumption loans increased 24.5 percent to P66.58 billion.

Socioeconomic Planning Secretary Ernesto Pernia earlier said the country’s gross domestic product likely grew 6.4 percent in the second quarter as growth rates after an election year are historically lower due to base effects.