Credit growth slows for 3rd straight month

MANILA, Philippines — Credit growth continued to slow down anew in January due to higher borrowing costs after monetary authorities lifted interest rates by 175 basis points last year to prevent inflation from spiraling out of control, according to data released by the Bangko Sentral ng Pilipinas (BSP).

BSP officer-in-charge Maria Almasara Cyd Tuaño-Amador said the loan exposure of the banking industry grew at a slower rate for the third straight month at 15.3 percent in January from the revised 15.7 percent in December.

Amador said loans disbursed by banks reached P7.93 trillion in January from P6.88 trillion in January last year.

Loans released for production activities booked a slower increase of 15.5 percent to P7.28 trillion from P6.3 trillion and accounted for 88.6 percent of the total loans disbursements in end-January.

The growth in lending to the real estate sector eased further to 10.7 percent to P1.38 trillion for a 16.8 percent share. 

Disbursements to the wholesale and retail trade as well as repair of motor vehicles and motorcycles grew faster at 16.5 percent to P1.13 trillion for a 13.7 percent share.

Likewise, the growth of disbursements to manufacturing companies accelerated to 14.8 percent to P1.07 trillion, accounting for 13 percent of the total loans, while the amount disbursed to the electricity, gas, steam and airconditioning supply was steady at 11.9 percent to P927.43 billion for an 11.3 percent share.

However. Amador said the increase in loans for household consumption further eased to 12.7 percent in January from 13.6 percent in December as releases reached P657.3 billion from a year-ago level of P583.02 billion.

“The deceleration in credit card loans and motor vehicle loans as well as the contraction in salary-based general purpose consumption loans offset the expansion in other types of household loans during the month,” she added.

She said the slow down could be attributed to the slower expansion in motor vehicle loans as well as the contraction in salary-based general purpose consumption loans and other types of household loans.   

Data showed the increase in motor vehicle loans slowed to 10.4 percent from 12.4 percent as disbursements reached P290.22 billion in end-January.The growth of credit card loans eased to 20.6 percent at P286.99 billion.