January bank lending slowest in 8 months

Bank lending eased anew in January as the industry registered its slowest growth in eight months due to lower disbursements to the productive sector and household segment.

Based on a report released by the Bangko Sentral ng Pilipinas (BSP), bank lending expanded at a slower pace of 19.1 percent in January from 19.4 percent in December last year.

This was the slowest growth since the 18.7 percent expansion in May last year.

Banks extended P7.13 trillion in loans in January, P1.14 trillion lower than the P5.99 trillion recorded in the same month last year.

“The BSP will continue to ensure that the expansion in domestic credit and liquidity is in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” BSP officer-in-charge Maria Almasara Cyd Tuaño-Amador said in a statement.

Amador said loans released for production activities grew at a slower pace of 18.1 percent to P6.3 trillion in January from P5.34 trillion in the same period last year.

Banks disbursed P1.25 trillion to the real estate sector in January, up by a slower 19 percent compared to the 19.6 percent growth in December.

Loans to the wholesale and retail trade as well as repair of motor vehicles and motorcycles zoomed 24.7 percent to P972.06 billion.

Credit to the manufacturing sector grew by 11.9 percent to P932.63 billion while loans extended to electricity, gas, steam and airconditioning supply slowed down to 24.8 percent to P829.18 billion.

The expansion of loans for household consumption also decelerated further to 20.3 percent from 20.8 percent. Disbursements to households amounted to P583.18 billion from a year-ago level of P484.94 billion.

The growth in motor vehicle loans also slowed down to 25 percent at P261.82 billion as consumers bought ahead of the impending imposition of higher excise tax under the comprehensive tax reform program in January.

Furthermore, credit card loans grew faster at 20.8 percent to P238.51 billion, while salary-based general consumption loans increased 7.1 percent to P69.97 billion.

“The slower increase in motor vehicle loans, salary-based general purpose loans and other types of household loans offset the faster expansion in credit card loans in January,” Amador said.