ECONOMIC activities such as those in the real-estate sector as well as consumer loans led to a double-digit growth in bank lending in March 2023, according to data from the Bangko Sentral ng Pilipinas (BSP).
Data showed bank lending grew 10.1 percent to P10.762 trillion in March 2023 from P9.777 trillion in March 2022.
A total of P9.397 trillion loans were extended to residents for various economic activities while consumer loans amounted to P1.052 trillion.
“The sustained growth in credit is supported by sound Philippine banking system conditions. Looking ahead, the BSP will continue to monitor domestic liquidity dynamics to ensure that credit conditions remain in line with its price and financial stability mandates,” BSP said.
BSP data showed the amount of loans extended for real estate activities reached P2.18 trillion, followed by Wholesale & Retail Trade, Repair of Motor Vehicles and Motorcycles with loans amounting to P1.25 trillion; and Electricity, Gas, Steam & Air-conditioning Supply, P1.175 trillion.
In terms of growth rate, outstanding loans for production activities grew by 8.9 percent in March from 8.7 percent in February.
This was mainly due to the sustained increase in credit to major industries, specifically electricity, gas, steam, and airconditioning supply (12.5 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (10.5 percent); financial and insurance activities (13.1 percent); manufacturing (9.1 percent); and real estate activities (4.2 percent).
In terms of the amount of consumer loans, credit card loans reached P570.359 billion, followed by Motor Vehicle Loans which reached P334.408 billion; Salary-Based General Purpose Consumption Loan, P123.825 billion; and other loans, P23.728 billion.
Consumer loans to residents rose by 21.3 percent in March, the same rate as in the previous month, with the expansion in credit card, motor vehicle and salary-based general purpose consumption loans.
“Outstanding loans to non-residents also increased by 12.6 percent in March from 14.8 percent in the previous month,” BSP added.
Meanwhile, domestic liquidity (M3) grew by 6 percent year-on-year to about P1 6.2 trillion in March 2023, according to the BSP.
The BSP said this is the same rate of expansion recorded in the previous month. On a month-on-month seasonally-adjusted basis, M3 increased by about 0.2 percent.
“Going forward, the BSP will continue to ensure that domestic liquidity conditions remain in line with the prevailing stance of monetary policy, in keeping with the BSP’s price and financial stability mandates,” BSP said.
Domestic claims rose by 12.4 percent year-on-year in March from 11.6 percent in the previous month.
Claims on the private sector grew by 9.6 percent in March from 9.9 percent in February due to the sustained expansion in bank lending to non-financial private corporations and households.
Net claims on the central government also increased by 21.4 percent in March from 17.5 percent (revised) in February, owing to the decline in deposits by the National Government with the BSP.
Meanwhile, net foreign assets (NFA) in peso terms decreased by 4.2 percent year-on-year in March, following the 3.1-percent contraction in February.
The NFA of banks declined mainly on account of higher bills payable. Similarly, the BSP’s NFA position fell by 0.9 percent in March.
Image credits: Patrick Roque via Wikimedia Commons CC BY-SA 4.0
