Nov. bank lending grows by over 11%

Bank lending accelerated in November last year by 11.1 percent from a year ago from a 10.6 percent growth in October as loans to businesses increased, the Bangko Sentral ng Pilipinas (BSP) said Friday.

Month-on-month, BSP said loans from universal and commercial banks rose by one percent.

Loans to residents rose by 11.3 percent from 10.7 percent in the longer term. Meanwhile, loans to non-residents declined by 3.8 percent from 6.9 percent.

Supporting overall loan growth, corporate loans rose by 9.8 percent from 9.1 percent.

The biggest borrowers included firms engaged in electricity, gas, steam and air-conditioning supply with a 9.6 percent loan growth, and wholesale and retail trade and repair of motor vehicles and motorcycles with 9.1 percent. Financial and insurance firms grew their loans by 4.4 percent.

However, consumer loans to residents slowed by 23.3 percent from 24 percent as Filipinos continued to avail of credit cards and auto loans.

Domestic liquidity also grew by 7.7 percent to P18.1 trillion from 5.4 percent on an annual basis.

Domestic liquidity includes bank deposits and their substitutes.

Debts inched higher

Bank lending to non-financial firms and households posted an 11.7 percent growth from 11.8 percent increase a month ago.

Meanwhile, national government debts were higher at 9.2 percent from 8.4 percent.

The country’s net foreign assets (NFA) in peso terms decreased by 9.8 percent from 11.3 percent. The BSP’s NFA grew by 12.8 percent while those of private banks contracted mainly due to increased payments for bills and bond securities.

BSP Governor Eli Remolona Jr. said demand for loans will rise gradually as the central bank’s lower benchmark for interest rates will fully take effect in one year and six months.

The BSP Monetary Board reduced its policy rate last year by a total of 75 basis points to 5.75 percent.

Remolona said the Monetary Board is considering easing its rate further this year to support higher consumption and, ultimately, overall economic growth.

“We call it the Goldilocks rate which is the rate that’s not too high and not too low. We’re still in the restrictive territory compared to what we think the Goldilocks rate is,” he said.