Philippines’ bank lending growth hit 12-month high in April

MANILA, Philippines — Bank lending posted its best growth in a year in April despite the high-interest rate environment, as improving economic conditions pushed up demand for loans.

Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Friday showed that outstanding loans of big banks, excluding their lending to each other, had expanded by 9.6 percent year-on-year to P11.91 trillion, the highest growth since April 2023.

That was faster than the 9.4-percent annualized growth in March. On a month-on-month basis, credit grew by 0.9 percent.

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The April bank lending data signified that demand for loans remained robust despite expensive borrowing costs.

“The pick-up in bank loans growth in recent months could be attributed to improved business and economic conditions,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in a commentary.

But Ricafort said credit growth was “still partly weighed by the relatively higher interest rates.”

Businesses get the lion’s share

Business lending to bankroll various production activities picked up by 7.8 percent to P10.2 trillion, accounting for 85.7 percent of total loans.

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That performance was driven by the rise in lending to key industries, including real estate activities (11 percent); electricity, gas, steam, and air-conditioning supply (9.2 percent); and wholesale and retail trade, and repair of motor vehicles and motorcycles (7.6 percent).

Meanwhile, consumer loans grew by 25.3 percent to P1.3 trillion due largely to the continued increase in credit card, motor vehicle, and salary-based general-purpose consumption loans. —Ian Nicolas P. Cigaral