MANILA – The Bangko Sentral ng Pilipinas is optimistic that bank lending will remain strong this year given the strong growth of the domestic economy and the continued rise of loans extended by banks.
BSP Governor Amando Tetangco Jr. said in the press release that, given the economy’s robust growth in the first quarter, bank lending could be expected to remain strong in the months ahead, thereby providing support to real sector activity.” The domestic economy grew unexpectedly by 6.4 percent in the first quarter this year from year-ago’s 4.9 percent on account of net exports and robust household spending, due mainly to the strong inflows from overseas workers.
Also, data released by the central bank yesterday showed that bank lending, excluding bank’s placements in BSP’s reverse repurchase facility, grew by 19.2 percent last April from last month’s 18.7 percent. Including RRP placements, bank lending slowed to 16 percent from last March’s 17.7 percent. Outstanding loans of the country’s universal and commercial banks amounted to P3.05 trillion at the end of the fourth month this year while net of RRP’s amounted to P2.86 trillion. Specifically, production loans, which accounts for 80 percent of bank’s total loan portfolio, rose by 19.7 percent last April compared to the previous month’s 19.3 percent.
This was led by the 57.6 percent hike in loans extended to the wholesale and retail sector followed by the 45.3 percent rise in loans to the construction sector and the 42.5 percent expansion in the public administration and defense sector. Loans extended to financial intermediation rose by 42 percent; manufacturing by 29.4 percent; transportation, storage, and communication, 26.8 percent; real estate, renting, and business services, 25.8 percent; and electricity, gas, and water, 25.1 percent. On the other hand, loans given to the agriculture, hunting and forestry and mining and quarrying contracted by 47.6 percent and 30.8 percent, respectively. Similarly, consumer loans posted a slower growth of 17.5 percent last April from last month’s 18.5 percent because of slower growth in auto loans, the press release added.*PNA