Wednesday, 9 June 2010

Bank lending grows 6.7% to P2.12 trillion

Written by Jun Vallecera
Business Mirror

BANK lending consistent with an accelerating economy quickened in April, having grown at an annual rate of 6.7 percent to P2.12 trillion from growth of only 5 percent, or only P1.98 trillion, in March, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

This was validated by a similarly accelerating growth in money supply averaging 12.4 percent during the period from 10.3 percent.

Money-supply growth, or M3 among economists, was earlier seen accelerating safely to 12 percent this year without the monetary authorities worrying over its inflationary impact.

“The demand for money strengthened further in April as domestic liquidity, or M3 growth, accelerated to 12.4 percent year-on-year from 10.3 percent in the previous month. On a monthly basis, seasonally adjusted M3 growth, likewise, rose to 1.8 percent in April compared with the revised 1.1 percent in April,” BSP Governor Amando M. Tetangco Jr. said in a statement.

According to him, bank-lending growth which excludes loans the banks obtain from the BSP accelerated in April.

Bank-lending growth on gross basis also accelerated to 6.2 percent in April.

Production loans accounting for nearly 85 percent of aggregate loan portfolio grew by 6.4 percent during the month, from 4.9 percent in March. Loans to the transportation, storage and communication sector grew the most at 20 percent; to real estate, renting and business services, 19 percent; and to wholesale and retail trade sector, 17.2 percent.

“Likewise, loans for household consumption continued to rise, particularly those extended to credit card and auto loans,” Tetangco said.

Lending to the construction sector also grew for the second month in a row after 11 months of contraction that started in April 2009.

“Lending for manufacturing activity continued to decline but at a slower rate of 0.9 percent, mirroring the recovery in global trade.

“Other sectors that reflected negative growth were financial intermediation at negative 0.8 percent and other community, social and personal services at negative 32.8 percent,” Tetangco said.

Given the strong first-quarter output, Tetangco said bank lending was likely to continue to grow at a fast pace the rest of the year.

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