Loan growth of Philippine banks slows down

Current lending can support sustainable economic growth, however.

The Bangko Sentral ng Pilipinas, the central bank, said outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, grew in April but at a slower pace of 12.0% compared to the growth of 14.2 % in March.

Inclusive of RRPs, bank lending grew by 13.7%, also slower from 14.7% March. On a month-on-month seasonally-adjusted basis, commercial bank lending in April fell by 0.1% for loans net of RRPs but loans inclusive of RRPs rose by 0.1%.

Loans for production activities comprising over four-fifths of banks’ aggregate loan portfolio grew at 12.0% in April from 14.2% in March.

The growth in consumer loans in the same month rose to 11.5% from 10.8% a month earlier due mainly to the expansion in credit card receivables and auto loans.

BSP expect the double-digit growth of bank loans to continue as banks’ lending standards for loans to both households and enterprises remained generally steady for the first quarter.

BSP said it will continue to ensure that liquidity and credit conditions keep at pace with overall economic activity while remaining consistent with its price stability objective.