Bank credit expansion remains tepid

While loans from big banks, or universal and commercial banks, excluding investments in the central bank’s reverse repurchase (RRP) facility, expanded at a slightly faster rate of 11.3 percent from April’s 11.2 percent, this remains relatively slower than March’s 11.8-percent expansion rate.

- By DERCO ROSAL

In a statement on Monday, July 7, the Bangko Sentral ng Pilipinas (BSP) said the faster lending growth was driven by loans to businesses and individual consumers.

Growth in outstanding loans to resident borrowers, excluding RRPs, still slowed to 11.8 percent in May from the 11.9-percent growth recorded in April, continuing the downtrend from March’s 12.4-percent growth.

Loans extended to nonresidents fell by 6.6 percent in May, easing from a sharper 10-percent drop recorded in April.

Business loans moderated to 10.2-percent growth in May from 10.3 percent in the previous month. Loan growth eased in May due to slower lending to major industries such as real estate activities (8.7 percent), wholesale and retail trade and repair of motor vehicles and motorcycles (9.8 percent), and transportation and storage (14 percent), the BSP explained.

Meanwhile, loans to the manufacturing sector contracted by three percent.