Bank credit growth up for 6th straight month

Philippine big banks posted a double-digit growth in loan disbursements, rising for the sixth straight month to 10.1 percent in May from 9.6 percent in April, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

- KEISHA TA-ASAN

Bank lending growth marked the fastest in 14 months or since the 10.2 percent expansion in March 2023 despite the current high interest rate environment.

Outstanding loans of big banks stood at P12.02 billion as of end-May, P1.11 trillion higher than the P10.91 trillion recorded in the same period last year.

Security Bank chief economist Robert Dan Roces said the higher credit growth could reflect rising loan demand.

“Despite high interest rates, consumer loans remained strong on pent-up demand for essential spending needs. This continued growth suggests some optimism in the outlook for Philippine consumer spending,” he said.

Bank lending has been increasing since December last year, reflecting robust credit demand despite the 450-basis-point hike in interest rates delivered by the BSP to tame inflation and stabilize the peso.