Bank lending growth eases

MANILA, Philippines - Bank lending continued to grow at a slower pace in February, indicating that lending institutions have become a bit more selective in extending loans.

In a statement, the Bangko Sentral ng Pilipinas said the growth of outstanding loans of universal and commercial banks eased to 15.2 percent last month compared to 17.3 percent in January.

Similarly, bank lending inclusive of reverse purchase placements with the BSP, grew by a slower 14.6 percent from 16.6 percent the previous month.

The bulk or 80 percent of banks’ total loan portfolio comprised loans for production activities, which expanded by a slower 14.5 percent from 16 percent in January.

The double-digit growth in production loans was driven by increased lending to manufacturing (15 percent).   However, gains were pared by declines in lending for  wholesale and retail trade (15 percent), real estate (10.6 percent), utilities sector (14.3 percent), financial intermediation (16 percent) and transportation and communication (15.5 percent).

On the other hand, bank lending to other sectors improved during the month except for public administration and defense, which declined by 2.8 percent.

Loans for household consumption grew 21.1 percent, driven by robust growth in credit card and auto loans as well as sustained growth in other types of loans.

Despite the slowdown in loan growth, the central bank said it would “continue to ensure that credit and liquidity conditions remain supportive of overall economic growth in a manner consistent with the BSP’s price and financial stability objectives.