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Freeman Cebu Business

Bank lending increases to 20.5% in September

C&C VIEWS - Ed Limtingco - The Freeman

According to the Institute for Development and Econometric Analysis, Inc.  latest NewsBriefs, in September 2014, universal and commercial banks held a combined total of P4.06 trillion in outstanding loans net of reverse repurchase  placements with the Bangko Sentral ng Pilipinas. This is a 20.5percent increase from a year ago, faster than the 20.1percent rise in August 2014.

Loans for production purposes surged by 18.7% in September, slightly slower than the 19% expansion in August. These loans make up four-fifths of the banks’ total loan portfolio.

Increased lending to the sectors of trade, real estate, manufacturing, utilities and financial intermediation propelled the growth. Only lending for public administration and defense dipped by 1.8percent.

On the other hand, loans for household activities, which make up a fifth of banks’ portfolio, also climbed by 17.7percent; this is faster than the 16.7percent rise seen in August. The 18percent and 89percent growth in auto loans and other types of loans were more than enough to compensate for the measly 3percent growth of credit card loans.

Furthermore per same published report, the month of September 2014 saw domestic liquidity temper its annual growth to 16.2percent, from 18.3percentin August. Domestic liquidity, or M3, amounted to P7.2 trillion as public and private sector credit both expanded. Domestic claims went up by 16percent, with most loans being coursed through key production sectors. Meanwhile, public sector credit increased by 12.9percent.

Per IDEA, as of end June 2014, universal, commercial, and thrift banks held a total of P803.3 billion worth of consumer loans, 18.1percent higher from the same period in 2013. Loans for real estate, automobiles and credit card fueled the growth. Despite the surge, the nonperforming CL ratio improved to 5percent from 5.2percent in the previous quarter. Within Southeast Asia, the banking industry’s exposure to consumer loans at 16.5percent remains to be low.

Likewise it was reported that government spending continued to be on a net surplus, inviting concerns of another drag on the country’s economic growth. Following a second quarter surplus of P30.15 billion, the Department of Finance reported that a P22.9 billion surplus was incurred in the third quarter of 2014. Overall, the P31.1 billion deficit for the first nine months of 2014 is far below the P266.25 billion deficit program set by the government.

Moreover, in this year’s Global Gender Gap Report, the World Economic Forum has ranked the Philippines 9th among 142 countries in closing disparities between men and women in terms of economic, educational, health and political opportunities. On a scale of 0 to 1 with 1 being perfect equality, the country scored 0.781, down from .783 in 2013. Despite the slip in scores, the Philippines topped the countries in Asia and the Pacific.

Also, for the first half of 2014, Philippine exports earned $29.8 billion, an 8.3percent rise from the same period in 2013. Electronic products raked in the most earnings at $11.9 billion. Overall, the country’s trade deficit narrowed to $1.64 billion from $2.24 billion a year ago according to the researchers of IDEA.

elimtingco@yahoo.com.

ASIA AND THE PACIFIC BANGKO SENTRAL BILLION DEPARTMENT OF FINANCE DEVELOPMENT AND ECONOMETRIC ANALYSIS GLOBAL GENDER GAP REPORT GROWTH LOANS WITHIN SOUTHEAST ASIA WORLD ECONOMIC FORUM
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