Credit growth climbs to 11-month high in March

MANILA, Philippines — Consumer loans jumped by 25.4 percent to P1.32 trillion in March, slightly faster than the 25.2 percent expansion a month ago.

Credit growth accelerated to an 11-month high in March, marking the fourth straight month of faster bank lending, fueled by higher production and consumer loans.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that loans disbursed by universal and commercial banks grew by 9.4 percent in March from 8.6 percent in February.

Loans released by big banks amounted to P11.79 trillion as of end-March, P1.01 trillion higher than the P10.78 trillion disbursed in the same period in 2023.

The March growth pace was also the fastest in 11 months or since the 9.7 percent posted in April 2023.

For March, loans to production activities increased at a faster rate of 7.7 percent, to P10.1 trillion from P9.4 trillion in the same month in 2023, and accounted for 85.9 percent of the total disbursements.

Disbursements to the real estate sector accelerated by 11.5 percent to P2.43 trillion, followed by the electricity, gas, steam and air-conditioning supply sector, which rose by 10.1 percent to P1.3 trillion.

The wholesale and retail trade, and repair of motor vehicles and motorcycles registered higher growth in loan disbursements with P1.33 trillion, for a share of 11.3 percent.

The manufacturing sector also saw a 4.9-percent increase to P1.23 trillion and accounted for 10.5 percent of the total loan disbursements.

The BSP also reported that consumer loans jumped by 25.4 percent to P1.32 trillion in March, slightly faster than the 25.2 percent expansion a month ago. Consumer loans accounted for 11.2 percent of total loans.

Credit card receivables surged by 30 percent to P744.7 billion in March from P572.87 billion in the same month in 2023. However, the pace was a tad slower than the 30.1 percent growth in February.

Auto loans zoomed by 19.1 percent to P402.11 billion from P335.64 billion, while salary-based general-purpose consumption loans rose by 17.6 percent to P145.79 billion and other loans surged by 32.8 percent to P31.77 billion.

“Looking ahead, the BSP will ensure that domestic liquidity and credit conditions remain in line with its price and financial stability objectives,” the central bank said.

It also reported a 5.7-percent increase in money supply or M3 to P17.2 trillion in March from P16.3 trillion in the same month in 2023.