Bank loans grew 4 percent in November from a year ago, faster than the 3.5-percent rise in October, driven by the more positive business outlook and wider vaccination program, data from the Bangko Sentral ng Pilipinas show.
“Outstanding loans of U/KBs [universal and commercial banks] continue to gain traction amid businesses’ optimistic economic outlook due to the easing of COVID-19 restrictions and the continued rollout of vaccines. On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, increased by 0.3 percent,” the BSP said in a statement.
Outstanding loans to residents, net of RRPs, went up by 4.1 percent in November from 3.7 percent in October amid the continued expansion in loans for production activities.
Outstanding loans for production activities increased by 5.3 percent in November, from 4.9 percent in October, led by the growth in loans for real estate activities (8.0 percent); information and communication (27.2 percent); financial and insurance activities (9.0 percent); manufacturing (6.7 percent); and transportation and storage (11.4 percent).
Outstanding loans to agriculture, forestry and fishing declined 8.3 percent).
Meanwhile, consumer loans to residents decreased at a slower rate of 7.1 percent in November after a 7.4-percent decline in the previous month, on improvement in credit card loans.
Outstanding loans to non-residents also increased by 0.4 percent following a decline of 3.7 percent in the previous month.
“The BSP sees enough scope to continue providing appropriate policy support in order to sustain the recovery in credit activity. Looking ahead, the BSP aims to keep a patient hand on its monetary tools to allow the economic recovery to gain stronger traction, in line with its price and financial stability mandates,” it said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the growth of bank lending in the coming months could continue to pick up as the country shifts towards granular lockdowns, away from large scale lockdowns in the city/provincial/regional levels in the past.
Metro Manila, however, returned to Alert Level 3 this month.
Ricafort said the alert level system, “could lead to more economic activities and more demand for loans and credit as well, especially in preparation for the seasonal increase in demand during the holiday season, which accounts for the biggest chunk of sales for many businesses in a typical year.”
He said the relatively slower growth in bank loans in recent months could also be partly attributed to less reliance on bank loans by some of the country’s biggest businesses, in view of their increased fund-raising activities in the capital markets, especially through the bond and stock/equity markets.
Meanwhile, data showed that domestic liquidity or the money supply circulating in the financial system expanded by 8.3 percent year-on-year to about P14.8 trillion in November 2021, unchanged from the growth rate recorded in October.
Domestic liquidity also increased by 0.5 percent on a month-on-month seasonally-adjusted basis.
