Bank loans up 12.2% in February

Bank loan growth accelerated further in February as a consequence of monetary authorities’ series of policy moves to lower the cost of money and help the Philippine economy grow faster, data from the central bank showed.According to the Bangko Sentral ng Pilipinas (BSP), preliminary data showed that outstanding loans of universal and commercial banks—excluding their short-term deposits with the central bank—grew by 12.2 percent in February.

This pace was faster than the 11.6-percent expansion recorded in the previous month. Loans for production activities, net of placements with the BSP, expanded by 9.6 percent in February, higher than the 8.8-percent growth in January.

Since he assumed office last year, BSP Governor Benjamin Diokno has presided over rate cuts totaling 150 basis points, reversing the monetary policy tightening imposed in 2018 to combat spiraling inflation. He has also overseen cuts in the banks’ reserve requirements totaling 600 basis points, the most recent of which was implemented earlier this month. Both policy-easing moves result in cheaper cost of funds that, in turn, help make bank loans more attractive to borrowers.

The BSP said that sustained increase in production loans was driven primarily by lending to real estate activities (up by 20 percent), financial and insurance activities (19 percent), electricity, gas, steam and air conditioning supply (9.7 percent), information and communication (22.5 percent) and construction (16.2 percent). INQ