Commercial bank lending up 15.6% in April

Commercial banks’ lending activities grew by 15.6 percent year-on-year to P5.22 trillion in April, reversing the slowdown posted a month ago, Bangko Sentral ng Pilipinas data showed.

In April, the increase in outstanding loans to residents and non-residents, net of reverse repurchase (RRP) placements with the BSP, was higher than the 14.8 percent in March.

Bank lending inclusive of RRPs rose 14.8 percent to P5.5 trillion, also faster than the previous month’s 13.5-percent growth.

“On a month-on-month seasonally adjusted basis, commercial bank lending increased by 1.5 percent for loans net of RRPs and by 1.7 percent for loans inclusive of RRPs,” the BSP said.

In April, loans for production activities accounted for more than four-fifths of banks’ aggregate loan portfolio. Production loans grew 15.6 percent to P4.7 trillion, likewise faster than the 15-percent growth a month ago.

The BSP said production loan growth last April was boosted by higher lending to the following sectors: information and communication (up 31.2 percent); electricity, gas, steam and air-conditioning supply (up 30.6 percent); real estate activities (up 20.5 percent); financial and insurance activities (up 18.5 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (up 15.5 percent).

“Bank lending to other sectors likewise expanded during the month, except for professional, scientific and technical activities (down 0.5 percent); water supply, sewerage, waste management and remediation activities (down 1.3 percent); and public administration and defense, compulsory social security (down 7.3 percent),” the BSP said.

Loans for household consumption, meanwhile, jumped by a faster 16.8 percent to P405.5 billion in April compared to the 15.9-percent increase in the previous month.

That, according to the BSP, was  “due to expansion in motor vehicle loans and sustained growth in credit card loans and salary-based general purpose loans, which offset the decline in other types of household loans.”

Debt watcher Standard and Poor’s (S&P) last month warned about rising bad consumer loans, which were seen posing risks to the overall outlook of the domestic banking sector.

Last week, S&P financial services ratings director Ivan Tan noted that the share of bad consumer loans had been on the rise, almost double the total nonperforming loans (NPLs) and higher than those in neighboring countries.

“Unemployment and underemployment in the Philippines remain high. Despite high economic growth, the wealth gap is still uneven. Consumer repayment has not improved over the last few years,” Tan explained.