The Bangko Sentral ng Pilipinas, or BSP, on Monday reported bank lending slightly grew by 0.7 percent from August to September this year amid a high-interest environment.

Compared to last year's data, the BSP said outstanding loans of universal and commercial banks rose by 6.5 percent in September from 7.2 percent in August.

Outstanding loans to residents grew by 6.6 percent from 7.2 percent between those months this year.

Loans for production activities grew by 4.9 percent from 5.5 percent, with air conditioner, electricity, gas and steam providers posting the highest loan growth at 9.2 percent.

This was followed by the information and communication sector (8.1 percent) and wholesale and retail trade, and repair of motor vehicles and motorcycles (6.6 percent).

Top borrowers

Other top borrowers were real estate (5.0 percent) and financial and insurance activities (4.9 percent).

Consumer loans to residents remained flat at 23.5 percent growth from 23.1 percent mostly due to continued high volumes of credit card transactions and auto loans.

Meanwhile, outstanding loans to non-residents grew slower by 0.3 percent from 8.4 percent.

Some local and global economists expect the BSP to maintain its policy rate steady at 6.5 percent at its Monetary Board meeting on Thursday.

They reasoned the unchanged rate will help drive higher consumption and business activities while ensuring a healthy foreign exchange rate and decent investment level.

Inflation last month slowed to 4.9 percent from 6.1 percent in September as certain food items became cheaper prompting forecasts of a steady BSP rate.

Peso competitive

Meanwhile peso has remained competitive ranging from P55 to P56 per dollar or below the BSP threshold of P57 per dollar data from the Bankers Association of the Philippines.

The World Bank said prices of goods will still be affected by climate change on agricultural production and other supply barriers such as geopolitical tensions between the US and China and the latter against certain Southeast Asian countries.

For its 2024 forecast, the bank is more optimistic that economies in East Asia and Pacific (excluding China) will expand from 4.6 percent to 4.7 percent as the rest of the world further recover from the pandemic.