Double-digit growth rates of loans extended by the country’s large banks persisted in November 2022 at 13.7 percent to reach P10.64 trillion compared with lending activities in the same month of 2021 as brisk demand from consumers and businesses continued to help drive the Philippine economy.
But preliminary data at the Bangko Sentral ng Pilipinas (BSP) show that lending growth has slowed down from 13.9 percent year-on-year in October.
The slowing happened after three consecutive months of going faster from 12 percent in July to 12.2 percent in August, through 13.4 percent in September.
During those third-quarter months, Philippine gross domestic product (GDP) grew beyond forecasts—even those of the government—at 7.6 percent, thanks mainly to renewed production activities of enterprises and “revenge spending” among consumers amid further reopening of the domestic economy.
Even with the slight slowing in November, outstanding loans of universal and commercial banks—net of short-term loans to the BSP—was 0.3 percent more in that month compared with October.
Philippine residents borrowed 13.4 percent more, slightly faster than the growth rate of 13.3 percent in October.
In November, loans to businesses grew by 12. 4 percent, with the biggest volumes of funds being lent to companies engaged in real estate activities growing by 12.2 percent to P2.08 trillion; manufacturing by 15.6 percent to P1.22 trillion; financial and insurance activities by 13.1 percent to P1.05 trillion, and information and communication by 24.3 percent to P576.2 billion.
The growth of loans to residents—for credit card transactions, motor vehicle purchases and for salary-based general purpose—revved up to 24.1 percent at P1 trillion in November from 22.6 percent in October.
Also, the growth of outstanding loans to nonresidents slowed to 24.6 percent after expanding by 33 percent in the previous month.
“Sustained growth in credit and domestic liquidity will continue to support economic activity and domestic demand,” the BSP said.
RCBC chief economist Michael Ricafort said the monthly growth rate in November was among the fastest paces in nearly four years, with the volume equivalent to more than half of Philippine GDP.
“For the coming months, demand for bank loans would still be fundamentally supported as the economy already reopened further toward greater normalcy that makes companies more decisive on new investments and expansion plans that require various fund-raising activities such as through bank financing,” Ricafort said.