MANILA -The growth in lending by the Philippines’ largest banks slowed down for the sixth straight month to a nearly two-year low of 6.5 percent in September, adding credence to concerns that lukewarm private spending will lead to more subdued economic growth in the fourth quarter.
Preliminary data at the Bangko Sentral ng Pilipinas show that the growth in total lending, net of short-term loans to the central bank, continued to lose momentum after reading out at 13.4 percent in September 2022 and 7.2 percent last August.
The September rate was the slowest in 21 months or since the 4.8 percent posted in December 2021, as high borrowing rates dampened demand.
Compared to data from August when the amount of loans outstanding amounted to P10.07 trillion, bank lending increased by 0.7 percent to reach P11.17 trillion.
In September, lending to Philippine residents alone grew by 6.6 percent to a net of P10.85 trillion.
Similarly, this was slower than the growth rate of 7.2 percent seen last August when residents owed banks a total of P10.75 trillion.
Of the amount lent to residents as of September, loans granted to businesses grew by 4.9 percent to P9.65 trillion.
This was also slower compared to the 5.5-percent growth in August when outstanding obligations used for production activities were pegged at P9.58 trillion.
The biggest borrowers were companies engaged in real estate activities at P2.3 trillion; wholesale and retail trade, P1.28 trillion; electricity, gas, steam and air-conditioning supply,P1.24 trillion; manufacturing, P1.17 trillion, and financial and insurance activities at P1.05 trillion.
Activities that showed the biggest drop in borrowing were professional, scientific and technical services as well as education.
Loans granted to these two sectors fell by 10.9 percent to P31.57 billion and P30.29 billion, respectively.
Meanwhile, the growth in consumer loans to residents—for credit card transactions, motor vehicle purchases, salary-based general purpose and other purposes—inched up to 23.5 percent to hit P1.19 trillion in September. In August, lending to consumers grew by 23.1 percent to reach P1.17 trillion.
READ: Banks seen more cautious when lending in Q3
Of these, the growth in credit card loans slowed slightly to 30.4 percent from 30.5 percent in the previous month, as did salary-based loans (14.5 percent from 17.7 percent).
On the other hand, the growth in loans for the purchase of motor vehicles revved up to 13.4 percent from 11 percent.
Further, the growth in outstanding loans to nonresidents was a marginal 0.3 percent to P325.7 billion from 8.4 percent at P324.3 billion in August.
READ: PH financial system sound and stable, says Bangko Sentral
Pantheon Macroeconomics, based in the United Kingdom, said in a commentary that private-sector consumption remained on a “continued slowdown” to 5 percent in the third quarter from 5.5 percent in the second quarter this year. INQ