July bank loans grew fastest since April 2020

The increase in loans extended by the country’s large banks continued at a brisk pace, pegged at 12 percent in July which was the same yearly rate observed in June, amid the continuing reopening of the domestic economy and despite higher benchmark interest rates set by the Monetary Board.

Preliminary data show that compared to lending in June, the volume—net of short-term loans to the Bangko Sentral ng Pilipinas (BSP)—increased by 0.6 percent in July, slower than the 2.3 percent month-on-month growth recorded in June.

Philippine residents borrowed 12 percent more, with the biggest volumes going to the real estate activities; manufacturing; and wholesale and retail trade.

The growth of consumer loans to residents—for credit card transactions, motor vehicle purchases and for salary-based general purposes—revved up to 15 percent in July from 11 percent in June. Also, the growth of outstanding loans to nonresidents slowed to 14.6 percent in July from 16.3 percent in June.

“The sustained growth in bank lending and liquidity will support the recovery of economic activity and domestic demand,” the BSP said in a statement.

RCBC chief economist Michael Ricafort said bank lending has been growing for the 12th consecutive month as the economy reopened further toward greater normalcy, with Metro Manila and other areas at the lowest alert level 1.