U/KB outstanding loans grew by 13.4% Y-O-Y

SALARY-BASED loans obtained by Filipinos continued to post a growth of over 60 percent for the third consecutive month, according to data from the bangko Sentral ng Pilipinas (BSP).

The latest data showed the outstanding loans of universal and commercial banks (U/KBS), net of reverse repurchase (RRP) placements with the BSP, grew by 13.4 percent year-on-year to P10.58 trillion in December 2022.

The bulk of these loans were still used for production in various sectors of the economy at P9.555 trillion while P1.025 trillion was used for consumer loans: credit cards; motor vehicle loans; salary-based general purpose consumption loans; and, others.

“The sustained growth in credit activity and ample liquidity will continue to support the recovery of economic activity and domestic demand,” the central bank said.

“Looking ahead, the BSP will ensure that liquidity and credit conditions are in line with its primary mandate of promoting price and financial stability,” it added.

Based on the data, salary-based general purpose consumption loans posted a growth of 63.8 percent to P120.718 billion in December 2022.

This is slower than the 67.4 percent recorded in November but faster than the 63 percent posted in October. These loans reached P124.24 billion in November and were at P73.697 in December 2021.

Salary-based general purpose consumption loans posted the fastest growth among consumer loans in December. This was followed by credit card loans which grew 26.3 percent in the last month of the year.

The growth in credit card loans was slower than the 26.6 percent posted in November. In total, credit card loans reached P554.314 billion in December, higher than the P539.695 in November and P438.816 billion in December 2021.

This was followed by Motor Vehicle Loans which posted an 11.5 percent growth in December from 8.7 percent in November last year. These loans reached P325.367 billion in December 2022.

This was slightly lower than the P325.884 billion posted in November 2022 but was higher than the P291.796 billion in December 2021.

Meanwhile, outstanding loans to residents, net of RRPS, rose by 13.2 percent in December after a 13.6-percent (revised) increase in the previous month.

Outstanding loans for production activities expanded by 12.1 percent in December from a 12.6-percent (revised) rise in November driven largely by the credit growth of key industries.

These industries included real estate activities (13.1 percent); manufacturing (14.9 percent); electricity, gas, steam and airconditioning supply (14.4 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (12.7 percent); and information and communication (21.6 percent).

Domestic liquidity

BSP’S preliminary data on domestic liquidity (M3) grew by 6.4 percent year-on-year to P16.3 trillion in December from the 5.5-percent growth in November. Month-on-month, M3 increased by 0.9 percent.

Domestic claims rose by 12.5 percent year-on-year in December from 11.0 percent (revised) in the previous month with the broadly steady pace of bank lending to the private sector.

“The BSP will ensure that domestic liquidity conditions remain appropriate to support the prevailing stance of monetary policy, consistent with the BSP’S price and financial stability objectives,” BSP said.

Claims on the private sector grew by 10.5 percent in December from 10.6 percent (revised) in November due to the sustained expansion in bank lending to non-financial private corporations and households.

Net claims on the central government rose by 21 percent in December from 13.8 percent in November owing to the borrowings by the National Government.

Meanwhile, net foreign assets (NFA) in peso terms declined by 3.5 percent in December from the 1.5-percent (revised) contraction in November.

The NFA of banks fell mainly on account of higher bills payable. Similarly, the BSP’S NFA position contracted by 3.4 percent in December.