Wednesday, 18 February 2009

Philippine Bank Lending Expands Further in December

Media Releases
Bangko Sentral
02.18.2009
http://www.bsp.gov.ph/publications/media.asp?id=2016
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Lending activity continued to be robust in December. Outstanding loans of commercial banks including reverse repurchase agreements or RRPs increased in December by 17.5 percent year-on-year, while bank lending net of banks’ RRP placements with the BSP also grew by 20.5 percent. These growth rates were, however lower than those recorded a month earlier.

Preliminary data for December were obtained from the new system of bank reporting under the Financial Reporting Package (FRP). This system replaced the Consolidated Statement of Condition (CSOC) reports. The FRP adopts the detailed classification of the amended 1994 Philippine Standard Industrial Classification (PSIC) for international comparability. The FRP also classifies lending by production activities (which covers 16 economic sectors) and by household consumption purposes (with three economic categories). Bank reports previously classified loans into only nine economic sectors.

Loans for production activities drove the expansion in bank lending, growing by 18.3 percent in December, relatively steady from the 18.4 percent expansion posted in November. The following production sectors contributed significantly to lending growth: agriculture, hunting, and forestry (which grew by 53.0 percent); real estate, renting, and business services (30.2 percent); wholesale and retail trade (27.9 percent); and transportation, storage and communication (45.9 percent). Lending to the financial intermediation sector contracted by 14.9 percent, as did lending to the fishing and mining sectors.

Consumption loans grew by 13.4 percent in December from 20.6 percent in November. The growth came mostly from credit card receivables which expanded by 20.5 percent from 23.3 percent in the previous month. Auto loans rose by 10.5 percent from 12.6 percent in the previous month. Meanwhile, loans for other household consumption fell by 16.3 percent from a growth of 22.0 percent in November.

BSP Governor Amando M. Tetangco, Jr. said that the BSP keeps a close watch on bank lending trends to generate an advance indicator on the direction of future economic activity. He noted that the BSP’s monetary easing moves in previous months are expected to support credit growth in the months ahead to help alleviate the effects of the global financial crisis on the domestic economy.

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