Banks lent more money last February, a result of monetary authorities’ series of policy moves to lower the cost of borrowing and help the economy grow faster, according to Bangko Sentral ng Pilipinas (BSP) data.
The BSP, in a statement, said initial data showed that loans of universal and commercial banks, including short-term deposits at the BSP, grew by 12.2 percent in February.
This pace was faster than the 11.6-percent expansion recorded in January.
On a month-on-month seasonally-adjusted basis, commercial bank loans deposits with the central bank grew by 1 percent.
Loans for production activities, net of placements with the BSP, expanded at a rate of 9.6 percent in February, higher than the reported growth in January at 8.8 percent.
Since he assumed office last year, BSP Governor Benjamin Diokno has presided over rate cuts totalling 150 basis points, reversing the monetary policy tightening imposed in 2018 to combat spiralling inflation.
He has also overseen cuts in banks’ reserve requirements totalling 600 basis points, the most recent of which was implemented earlier this month.
Both policy easing moves result in cheaper cost of funds which, in turn, help bank loans become more attractive to borrowers.
The BSP said that sustained increase in production loans was driven primarily by lending to real estate activities (20.0 percent); financial and insurance activities (19.0 percent); electricity, gas, steam and air conditioning supply (9.7 percent); information and communication (22.5 percent); and construction (16.2 percent).
Bank lending to other sectors also increased during the month, except those to manufacturing (-2.1 percent), mining and quarrying (-10.2 percent), and other service activities (-34.7 percent).
Growth in loans for household consumption remained robust at 37.6 percent in February from 40.1 percent in January due mainly to faster growth in motor vehicle loans during the month.
“Going forward, the BSP will remain vigilant in monitoring liquidity and credit dynamics amid significant disruptions to economic activity,” the central bank said in a statement.