The series of interest rate cuts by the central bank started to make itself felt in July through increased lending and more cash in circulation, according to government data.
The Bangko Sentral ng Pilipinas (BSP) said loans from universal and commercial banks grew at a rate of 11.1 percent in July from 10.5 percent in June.
July data represented the first significant increase in the pace of loan growth since the central bank started cutting interest rates in early May.
Commercial loans grew by 2.1 percent on a month-on-month basis, said the central bank.
Loans for production grew by 9.8 percent in July, the BSP data showed. It was driven primarily by lending for real estate, finance and insurance, electricity, gas, steam and air conditioning supply, construction, wholesale and retail trade, repair of motor vehicles and motorcycles.
Lending for other purposes, like community, social and personal, was negative 41.3 percent while lending for professional, scientific and technical projects was negative 36 percent.
Household consumption loan grew by 23 percent in July from 15.3 percent in June, indicating more cars being bought and more employees getting salary loans.
Cash in circulation grew to P11.9 trillion in July./tsb