Connect with us

Hi, what are you looking for?


Bank lending growth steady at 12% in July

BANK LENDING GROWTH remained steady in July, as borrowing costs remained low, according to the Bangko Sentral ng Pilipinas (BSP).

Data from the BSP showed outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the central bank, rose by 12% to P10.21 trillion in July, from P9.12 trillion a year earlier.

The July growth rate was unchanged from June. July also marked the 11th straight month of expansion in lending activities.

Lending, net of RRP placements with the BSP, inched up by 0.6% month on month.

Outstanding loans, inclusive of reverse repurchase agreements, grew by 11.6% in July, a tad slower than the previous month’s 11.7%.

Amid the rise in lending, the BSP said domestic liquidity (M3) expanded by 7% to P15.4 trillion in July. The expansion was slower than the revised 7.2% annual growth in June.

M3 — considered as the broadest measure of liquidity in an economy — edged up by 0.3% month on month.

“The sustained growth in bank lending and liquidity will support the recovery of economic activity and domestic demand,” BSP Governor Felipe M. Medalla said in a statement on Tuesday.

“Looking ahead, the BSP will continue to ensure that liquidity and credit dynamics remain in line with the BSP’s price and financial stability objectives.”

BSP data showed outstanding loans to residents net of RRPs expanded by 11.9% to P9.92 trillion in July, from P8.86 trillion in the same month last year. The pace of annual expansion was unchanged from June.

Borrowings for productive activities jumped by 11.6% to P8.98 trillion in July, fueled by a 14% rise in loans for real estate activities to P2.9 trillion; and a 16.2% jump in loans for manufacturing to P1.17 trillion.

Consumer loans to residents also went up by 14.7% to P934.71 billion, faster than 10.9% growth in June. This was driven by a 21% increase in credit card loans and a 39.2% jump in salary-based general purpose consumption loans. Motor vehicle loans inched up by 1% in July.

Meanwhile, outstanding loans to nonresidents grew by 14.6% in July, slowing from the 16.4% in June.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa in a Viber message said bank lending continues to benefit from the previous easing of monetary policy.

“Growth momentum has solidified and ensures expansion over the next few quarters. Bank lending is expected to remain in expansion as the economy reopens and demand for credit stays healthy,” he said.

The BSP slashed interest rates by 200 basis points (bps) in 2020 to help the economy amid the coronavirus pandemic.

“Gains, however, will be capped by recent tightening carried out by the BSP. Rate hikes are, by design, carried out to slow economic growth to ensure demand falls to match limited supply,” Mr. Mapa added.

The BSP has raised rates by 175 bps so far this year as it battles inflation.

M3 GROWTH“As the BSP proceeds with the withdrawal of monetary accommodation, it will continue to ensure that domestic liquidity conditions remain conducive to sustaining the economic recovery, in line with the BSP’s price and financial stability objectives,” Mr. Medalla said in a separate statement.

Domestic claims rose by 11.5% in July, higher than the revised 9.9% in June, due to improved bank lending to the private sector.

“Claims on the private sector grew by 8.9% in July from 8.8% in June with the sustained expansion in bank lending to nonfinancial private corporations and households,” the BSP said.

Net claims on the central government jumped by 22.2% from 15.3% in June, as the National Government sustained its borrowings.

Net foreign assets (NFA) in peso terms fell by 5.2% after expanding by 5.6% in the prior month. The BSP attributed the decline in the NFA position to the year-on-year drop in gross international reserves (GIR).

Latest data from the BSP showed GIR stood at $98.83 billion as of end-July, 2% lower than the $100.85-billion level as of end-June.

GIR also fell by 7.8% from its $107-billion level in July last year. The GIR level has been decreasing since February this year. — Keisha B. Ta-asan

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



PHILIPPINE STAR/ MICHAEL VARCAS WASHINGTON D.C. — The United States is seeking to form a coalition of countries to drive negotiations on a global...


Buildings are seen along EDSA in Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN By Diego Gabriel C. Robles  THE WORLD BANK (WB) upgraded...


Heavy traffic is seen on the southbound lane of EDSA in Cubao, Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN THE PHILIPPINE auto industry’s...


REUTERS THE BANGKO SENTRAL ng Pilipinas (BSP) may deliver a second off-cycle rate hike in early November when the US Federal Reserve is expected...


Vendors arrange their goods at a public market in Manila. — PHILIPPINE STAR/ RUSSEL A. PALMA THE ASIAN Development Bank (ADB) is planning to...

Editor’s Pick

With the reversal of the 1.25% rise in National Insurance Contributions happening on the 6th of November, employers across the nation have an opportunity...

You May Also Like


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.