Bank lending grows 11.7% in July – Bangko Sentral

Bank lending grew 11.7 percent in July, the first time in seven months the activity attained double-digit growth, the Bangko Sentral ng Pilipinas said Tuesday. The July loan portfolio of banks totaled P2.156 trillion, the central bank said in a statement. Data released by the Bangko Sentral ng Pilipinas (BSP) showed that bank lending last posted double-digit growth in December when it grew by 10 percent. Bank lending then took a slower pace in succeeding months as entrepreneurs looked to other sources of finance. BSP Governor Amando M. Tetangco Jr. said that entrepreneurs either tapped the equities market or sell debt papers to investment-starved insurance companies and investment banks with a placement horizon beyond 10 and 20 years. “Outstanding loans of commercial banks, net of banks’ reverse repurchase placements with the BSP, grew at a faster pace of 11.7 percent in July compared to the previous month’s expansion of 9.6 percent," Tetangco said in a statement Tuesday. “The growth of bank lending, inclusive of reverse repurchase papers or RRPs, also accelerated by 8.9 percent from 5.5 percent in June, to reach P2.3 trillion," the central bank chief said. “On a month-on-month seasonally-adjusted basis, commercial banks’ lending in July rose by 0.2 percent for loans net of RRPs but declined by 0.2 percent for loans inclusive of RRPs," Tetangco added. Loans from production activities grew 12 percent in July from 9.3 percent in Jun, central bank data showed. The bulk or 85.5 percent of loans were specified as finance for production activities. “The growth in bank lending, especially to productive activities, is in line with the ongoing overall expansion in domestic economic activity. The BSP believes that given the strong demand and ample liquidity in the economy, bank lending will continue to rise," Tetangco said. "Going forward, we will continue to monitor unfolding economic and financial developments to ensure monetary conditions remain conducive to growth while at the same time consistent with our price stability objective," Tetangco added. Credit card, car financing, and other landing activities labeled lumped as consumers loans slowed to 12.5 percent from 13 percent in the same June-July period, the central bank said. —VS, GMANews.TV