Philippine banks sustain 10% loan growth

Bangko Sentral ng Pilipinas. (File photo / Philippine Daily Inquirer)

MANILA  -The growth of lending activities among large banks in the Philippines was “broadly steady” at 10.1 percent in March, with the amount lent reaching P10.76 trillion, according to the Bangko Sentral ng Pilipinas (BSP).

The slight increase in the pace of expansion was seen after a series of slowing down in the previous three consecutive months, from 13.9 percent last November to 10 percent in February.

Preliminary data at the BSP also show that on a month-on-month basis, outstanding loans to the real economy (net of short-term loans to the central bank) increased by 0.2 percent or P18.1 billion. This followed two consecutive months of 0.2-percent decreases.

Last March, Philippine residents borrowed 10 percent more to end with P10.45 trillion debt, net of BSP short-term loans. This was slightly faster than the growth rate of 9.9 percent in February when they owed P10.37 trillion.

Of the amount lent to residents as of March, loans granted to businesses grew by 8.9 percent to P9.4 trillion, faster than the 8.7-percent growth in January when outstanding obligations were pegged at P9.33 trillion.

The biggest amounts were lent to companies engaged in real estate activities at P2.18 trillion; wholesale and retail trade, repair of motor vehicles and motorcycles at P1.25 trillion; electricity, gas, steam and air-conditioning supply at P1.18 trillion; manufacturing at P1.17 trillion; and financial and insurance activities at P1.02 trillion.

Also, the growth of consumer loans to residents— such as for credit card transactions, motor vehicle and home purchases, salary-based general purpose and other purposes —was steady at 21.3 percent to reach P1.05 trillion in March.

Meanwhile, outstanding loans to nonresidents grew at a slower pace of 12.6 percent to P312.37 billion from 14.8 percent in the previous month.

“The sustained growth in credit is supported by sound Philippine banking system conditions,” the BSP said in a statement.

“Looking ahead, the BSP will continue to monitor domestic liquidity dynamics to ensure that credit conditions remain in line with its price and financial stability mandates,” it added.

Fitch Ratings said growth of unsecured consumer lending might add to risk if the strong economic growth that supported household appetite to borrow would falter. INQ

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