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Bank lending posts 17.4% growth in September

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By Lee C. Chipongian

Big banks’ outstanding loans increased by 17.4 percent year-on-year in September, a slower pace of growth compared to the previous month’s 18.9 percent, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

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In peso value, the commercial banks’ loans amounted to P7.94-trillion net of reverse repurchase (RRP) placements with the BSP. With RRP, bank lending grew by 16.3 percent during the period to P8.19 trillion. The BSP said that on a month-on-month seasonally-adjusted basis, bank lending net of RRPs and loans inclusive of RRPs increased by 0.9 percent and 1.2 percent, respectively.

“The BSP will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” it said in a statement.

Bulk of big banks’ loans were borrowed for production activities, accounting for a total of 88.7 percent, net of RRP. Loans for production by economic activity was up 17.2 percent in September, slower than 19.1 percent in August. This totaled P7 trillion.

Loans to the wholesale and retail trade, repair of motor vehicles and motorcycles’ sector increased by 22.5 percent to P1.08 trillion while real estate loans went up by 15.8 percent to P1.34 trillion.

Loans to the manufacturing sector was also up by 20.6 percent to P1.05 trillion, while financial and insurance activities rose by 31.4 percent to P739 trillion. In the meantime, sectors such as electricity, gas, steam and airconditioning supply, and construction borrowed P895 billion and P249 billion, respectively, up by 10.6 percent and 36.4 percent.

Bank lending to other sectors also increased during the month except in professional, scientific and technical activities which fell by 11 percent; other community, social and personal activities dropped 12 percent; and, administrative and support services activities was down by 54.6 percent.

The BSP said loans for household consumption, on the other hand, rose by 17.9 percent in September from 15.8 percent in August. Total loans amounted to P625.76 billion, and these include credit cards, motor vehicles and salary-based general purpose consumption loans.

“The faster expansion in motor vehicle loans as well as the growth in credit card loans and salary-based general purpose consumption loans offset the decline in other types of household loans during the month,” said the BSP.

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