April loan growth slows

The amount of loans granted by the Philippine banking system grew at a slower pace in April due to the high cost of credit that prevailed just before regulators eased monetary policy in the following month.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said that outstanding loans of universal and commercial banks, net of deposits with the central bank, grew at a slightly slower rate of 12.7 percent in April from 12.9 percent in March.

Meanwhile, the growth in bank lending inclusive of deposits with the BSP accelerated to 12.8 percent in April from 11.5 percent in the previous month.

On a month-on-month seasonally adjusted basis, commercial bank loans net and inclusive of deposits with the central bank decreased by 1.1 percent and 0.4 percent, respectively.

Loans for production activities—which accounted for 88.2 percent of banks’ aggregate loan portfolio—increased at a slower pace of 12.4 percent in April from 12.8 percent in the previous month.

The growth in production loans was driven primarily by lending to financial and insurance activities (28.8 percent), real estate (13.9 percent), wholesale and retail trade, repair of motor vehicles and motorcycles (11.9 percent), construction (48.9 percent), manufacturing (10.7 percent) and electricity, gas, steam and air conditioning supply (11.2 percent).

Bank lending to other sectors also increased during the month except those to community, social and personal activities (-57.2 percent) professional, scientific and technical activities (-32.0 percent), human health and social work activities (-0.8 percent) and activities of households as employers, undifferentiated goods and services (-0.3 percent). —DAXIM L. LUCAS