Bank lending grows 11% in September

Banks increased lending activities by 11 percent in September as businesses sought more funds, while domestic liquidity decreased slightly, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Based on annual growth, universal and commercial banks posted slower lending to clients at 10.7 percent in August.

Month-on-month, bank lending inched up by 0.8 percent as inflation rates continued to decline and after the BSP lowered its policy rate to 6.25 percent in August from 6.5 percent in October 2023.

Loans to residents grew by 11.3 percent from 10.9 percent, while loans to non-residents decreased by 0.3 percent from 1.5 percent.

Loans for production activities mainly supported bank lending as transferred funds grew to P10.6 trillion by 9.8 percent from 9.4 percent.

The largest borrowers included real estate firms with a 14.2 percent loan growth, followed by wholesale and retail trade and repair of motor vehicles and motorcycles with 12 percent.

The others were manufacturing firms which posted a 10.6 percent loan growth and electricity, gas, steam and airconditioning supply with 7.5 percent.

On the other hand, consumer loans to residents slightly decreased to P1.5 trillion by 23.4 percent from 23.7 percent. Such loans mostly consisted of credit card transactions with a total value of P845.3 billion, followed by auto loans amounting to P435.7 billion.

Domestic liquidity lower

The country’s domestic liquidity slightly declined to P17.6 trillion by 5.5 percent from 5.4 percent year-on-year, as the national government withdrew more funds from the BSP to repay its loans for various projects.

Month-on-month, the growth inched up by 0.7 percent.

Domestic liquidity includes deposits, savings, checking accounts, promissory notes, and commercial papers.

BSP reported net claims on the national government grew slower by 6.6 percent from 8.5 percent year-on-year due to its loan obligations.

However, claims on the private sector increased by 12.4 percent from 11.9 percent as banks accelerated lending to non-financial corporations and households.