Businesses, households borrow more from banks in December

Lending growth continued at a faster pace in December, which the central bank said suggests growing confidence of business and households as financial and economic conditions stabilize. With credit demand recovering, a private sector-led expansion is gradually gaining ground, Bangko Sentral ng Pilipinas (BSP) Officer-In-Charge Nestor A. Espenilla, Jr. said on Wednesday. "Going forward, the BSP will continue to provide appropriate policy support to ensure credit availability in the system," he said in a statement. The central bank said lending, excluding bank placements in central bank vaults, went up by a tenth in December from 6.6 percent in the prior month, with both production and consumption loans increasing by 9.9 percent and 11 percent, respectively. In November, commercial banks' loans to productive sectors grew by 6.7 percent, while growth in consumption loans was 3.8. Including their placements in central bank vaults, banks' outstanding loans went up by 9.1 percent to P2.4 trillion in December from the prior year, compared with 2.6-percent growth in November. The seasonally adjusted monthly growth was 6.1 percent for loans inclusive of bank placements in BSP vaults, and 4.3 percent without. The central bank cited increased borrowings from the transportation; storage and communications; financial intermediation; real estate; renting and business services; electricity, gas and water; agriculture, hunting, and forestry; public administration and defense; wholesale and retail trade; hotels and restaurants; and health and social work sectors. The rate of the loan drop in manufacturing, which accounted for about 14 percent of total loans, was unchanged at 16.7 percent from the previous month. Construction loans declined more steeply at 27.4 percent in December from 4.5 percent in November, due in part to the ongoing real estate market correction, the BSP said. Meanwhile, consumption loans went up by 11 percent, higher than 3.8 percent in November, driven by rising demand for car financing and credit cards. — Norman P. Aquino, GMANews.TV