MANILA, Philippines--Loans extended by universal and commercial banks reached P2.08 trillion as of January this year, up 5 percent from the P1.99 trillion recorded in the same month last year.

According to the Bangko Sentral ng Pilipinas, the growth rate was much slower than the 10 percent recorded in December 2009, and the 24.5 percent growth rate posted in Jan. 2009.

BSP Deputy Governor Diwa Guinigundo said, however, that the fact that loans still increased meant that there was still a healthy level of liquidity in the economy.

The BSP does not see any credit crunch, noting that banks still have the capacity and appetite for lending.

?The continued expansion in overall lending stemming from faster growth in consumer loans along with the slower contraction in manufacturing and construction loans confirm ongoing improvement in real sector activity,? Guinigundo said in a statement.

The BSP attributed the slower growth in total loans to the mild increase in corporate loans.

Consumer loans grew at a faster pace in January, but this was not enough to offset the slowdown in the corporate loan growth.

Loans to businesses went up 4.4 percent to P1.86 trillion, slower than the 9.9-percent expansion recorded in January last year.

On the other hand, credit to individual borrowers grew by 12.5 percent to P175.5 billion, faster than the 11 percent recorded in January last year.

The BSP said the following sectors benefited from the growth in bank lending in January: transportation, storage, and communication; real estate; agriculture; wholesale and retail trade; financial intermediation; hotels and restaurants; and mining and quarrying.

Meanwhile, sectors like manufacturing, and mining and quarrying pulled down lending growth. Loans to the manufacturing sector dropped 15.5 percent year-on-year to P325.5 billion, while credit to the mining and quarrying sector fell by 27.3 percent to P3.28 billion.