LENDING activity in the country continued to be strong in July amid high prices, as the Bangko Sentral ng Pilipinas (BSP) reported a double-digit growth in loan expansion during the month.
The BSP said on Wednesday that outstanding loans of universal and commercial banks expanded by 12 percent year-on-year in July, the same rate of growth as in June.
Bank lending first collapsed into contraction territory by 0.7 percent in December 2020, as the restrictions forced by the pandemic affected the local banking industry.
In comparison, bank lending grew 13.6 percent before the onslaught of the global health crisis in March 2020.
The BSP said the sustained growth in bank lending and liquidity will support the recovery of economic activity and domestic demand.
“Looking ahead, the BSP will continue to ensure that liquidity and credit dynamics remain in line with the BSP’s price and financial stability objectives,” the Central Bank said in a statement.
Broken down, outstanding loans to residents rose by 11.9 percent in July following the same expansion in the previous month.
Outstanding loans for production activities increased by 11.6 percent in July after growing by 12 percent in June, driven mainly by the rise in lending for real estate activities (14.6 percent); manufacturing (16.2 percent); information and communication (29.3 percent); and wholesale and retail trade, repair of motor vehicles and motorcycles (9.3 percent).
Similarly, the expansion in consumer loans to residents accelerated to 14.7 percent in July from the revised 10.9 percent in June due to the year-on-year increase in credit card loans, motor vehicle loans, and salary-based general purpose consumption loans.
At the same time, the BSP said outstanding loans to non-residents grew by 14.6 percent in July after a 16.4-percent uptick in the previous month.
In a separate report, the BSP also said domestic liquidity—measured as M3—grew by 7 percent to P15.4 trillion in July from the revised 7.2-percent growth in June.
“As the BSP proceeds with the withdrawal of monetary accommodation, it will continue to ensure that domestic liquidity conditions remain conducive to sustaining the economic recovery, in line with the BSP’s price and financial stability objectives,” the Central Bank said.
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