Bank lending grows 20.1% in June
According to the Institute for Development and Econometric Analysis, Inc. latest NewsBriefs, in June 2014, universal and commercial bank lending remained strong with total outstanding loans net of reverse repurchase (RRP) placements with the BSP reaching P4.015 trillion.
The 20.1% lending growth in June 2014 from a year earlier, is slightly lower from the 21% registered in May 2014; effectively ending the ascending growth streak observed since October 2013. Inclusive of RRPs, total outstanding loans amounted to P4.27 trillion, 18.4% more from a year ago. In May 2014, it grew at a faster pace of 19.5%.
Loans for production activities took the lion’s share at P3.58 trillion, expanding by 17.7%. The rise was mainly driven by the increased lending towards real estate, renting and business services, electricity, gas and water, wholesale and retail trade, manufacturing and agriculture, hunting and forestry. However, lending towards mining and quarrying and public administration and defense declined.
On the other hand, loans for household consumption accounted for P311 billion, 16.2% higher from a year earlier. The expansion is attributed to higher auto, salary and personal loans.
Likewise per same published report, the Philippine Statistics Authority (PSA) reports that the general retail price index in the National Capital Region (NCR) went up by 2.9% in June 2014, led by food, beverages, tobacco, animal and vegetable oils, and manufactured goods. Meanwhile, growth eased for crude materials, mineral fuels, lubricants, machinery and transport equipment.
Furthermore, last week of July, the Monetary Board decided on a preemptive strike to halt inflation pressures, hiking the Bangko Sentral ng Pilipinas’ key policy rates by 25 basis points; overnight borrowing or reverse repurchase (RRP) facility is now at 3.75%, while overnight lending or repurchase facility is now at 5.75%. The rates on term RRPs and RPs were also raised. Left unchanged were the special deposit account rates and reserve requirement ratios.
Earlier hikes in the RRR and SDA rates by the BSP appears to be taking effect as the money supply or M3 in June 2014 climbed t0 P7.1 trillion, easing at a pace of 23% from 28.4% in May 2014. Private and public sector credit, along with net foreign assets contributed to the continued rise in domestic liquidity. The BSP plans to remain keen on any risks arising from strong liquidity growth.
Moreover it is interesting to note that , Bicol topped as the fastest growing region in the country in 2013, growing by 9.4%; NCR came at a close second with 9.1%, according to the PSA. On the other hand, MIMAROPA finished last with merely 1.7%, while the Autonomous Region in Muslim Mindanao expanded by 3.6%. Furthermore, seven out of the country’s 17 regions posted a faster growth rate in 2013 than in 2012. Real per capita GDP increased by 5.3%.
Lastly, the country is set for more air service talks with South Africa, Malaysia, and Hong Kong in the next months. Also applying to operate in the country is Saudi Arabian Airlines. Meanwhile, Cebu Pacific enjoyed a 7.6% rise in passengers flown in the first half of 2014 according to the researchers of IDEA.
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