Local bank lending still strong

Bank lending has remained strong in the country despite the deepening global financial turmoil.

The Bangko Sentral ng Pilipinas (BSP) said loans were up 24.1 percent in August to P2.04 trillion from a year ago level.

The growth in outstanding loans of commercial banks for the month was slightly above the July figure of 23.9 percent, the BSP said.

The growth was by and large across the board, with consumption loans also accelerating 20.2 percent, against 18 percent in July.

Credit card receivables rose 27 percent to P102 billion while auto loans expanded by 10.6 percent to P33 billion, reversing a July contraction, the BSP said.

Excluding reverse repurchase agreements or RRP placements with the BSP, however, the actual lending increased by 22.1 percent in August from 18.5 percent in July.

The BSP said preliminary data for August was obtained from the new system of bank reporting under the Financial Reporting Package (FRP), which replaced the Consolidated Statement of Condition (CSOC) reports.

The BSP explained that the FRP adopted the detailed classification of the amended 1994 Philippine Standard Industrial Classification (PSIC) for international comparability.

The FRP also classified lending by production activities covering 16 economic sectors and by household consumption purposes with three economic categories.

Previously, bank reports classified loans into only nine economic sectors.

BSP Officer-In-Charge Nestor A. Espenilla Jr. noted that loans for production activities led the expansion, growing by 19.8 percent in August compared to 16.4 percent in July.

The following production sectors contributed significantly to lending growth: wholesale and retail trade (which grew by 54 percent); transportation, storage and communication (94.2 percent); electricity, gas, and water (65.8 percent); agriculture, hunting, and forestry (19.2 percent); manufacturing (8.3 percent); and real estate, renting, and business services (13.8 percent).

Espenilla said consumption loans also accelerated in August, rising by 20.2 percent from 18 percent in July.