Close  

2018 BSP rate hikes continue to crimp loan growth

By: - Reporter / @daxinq
/ 05:30 AM March 01, 2019

The effects of the central bank’s interest rate hikes of 2018—meant to combat the sharpest spike in local prices in almost a decade—spilled over into the new year with the latest data showing a continued slowdown in loans extended by financial institutions.

In a statement, the Bangko Sentral ng Pilipinas said outstanding loans of universal and commercial banks, net of their short term deposits with the regulator, grew at a slower rate of 15.3 percent in January from 15.7 percent in December, according to preliminary data.

ADVERTISEMENT

Similarly, the growth in bank lending, inclusive of short term placements with the central bank, decelerated to 14.4 percent in January from 14.8 percent in the previous month. On a month-on-month seasonally adjusted basis, commercial bank loans net and inclusive of these short-term deposits with the central bank both rose by 0.9 percent.

Loans for production activities—which account for 88.6 percent of banks’ aggregate loan portfolio, net of central bank placements—rose at a slower pace of 15.5 percent in January from 15.8 percent in the previous month.

FEATURED STORIES

According to the BSP, the growth in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade, repair of motor vehicles and motorcycles (16.5 percent); financial and insurance activities (26.5 percent); manufacturing (14.8 percent); real estate activities (10.7 percent); electricity, gas, steam and air conditioning supply (11.9 percent); and construction (45.8 percent).

Bank lending to other sectors also rose during the month except that in professional, scientific and technical activities which contracted by 13.2 percent.

Similarly, the growth of loans for household consumption was lower in January at 12.7 percent relative to the 13.6-percent growth in December.

“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,” the regulator said.

Meanwhile, preliminary data show that domestic liquidity grew by 7.6 percent year-on-year to about P11.4 trillion in January 2019. This was slower than the 9.2-percent expansion in December 2018. On a month-on-month seasonally adjusted basis, domestic liquidity—or the amount of cash and near cash items circulating in the financial system —rose by 0.6 percent.

Demand for credit eased but remained the principal driver of money supply growth. Domestic claims grew by 12.2 percent in January from 14.6 percent in the previous month.

ADVERTISEMENT
Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Bangko Sentral ng Pilipinas, Loans, rate hikes
For feedback, complaints, or inquiries, contact us.
opinion

Rice industry paralysis

November 22, 2019 04:15 AM

opinion

Priority legislation in the 18th Congress

November 22, 2019 04:10 AM

entertainment

‘Tita-in-training’ Kim dabbles in stand-up comedy

November 22, 2019 12:50 AM



© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.