Bank lending picks up in July 2018 Lawrence Agcaoili (The Philippine Star) – September 1, 2018 – 12:00am

MANILA, Philippines — Bank lending grew faster in July as disbursements to the manufacturing sector picked up amid the tighter monetary conditions in the country, according to preliminary data from the Bangko Sentral ng Pilipinas.

BSP Governor Nestor Espenilla Jr. said credit growth accelerated to 19.6 percent in July from 19.1 percent in June.

Loans extended by banks reached to P7.75 trillion as of end-July, P1.27 trillion higher than the P6.48 trillion released in the same period last year.

Espenilla said loans released for production activities grew by 19.7 percent to P6.86 trillion as of end-July from P5.73 trillion in the same period last year. The amount accounted for 88.6 percent of the total loans disbursements.

Lending to the manufacturing sector picked up by 19 percent to P1.02 trillion, accounting for 13.2 percent of the total loans, while loans to the wholesale and retail trade as well as repair of motor vehicles and motorcycles increased at a faster rate of 25.6 percent to P1.07 trillion for a 13.9 percent share.

On the other had the growth in lending to the real estate sector eased to 15.9 percent to P1.31 trillion, while the amount disbursed to the electricity, gas, steam and airconditioning supply grew by only 9.7 percent to P853.76 billion.

Furthermore, the BSP chief said the increase in loans for household consumption further slowed down to 16.9 percent in July as releases reached P615.35 billion from a year-ago level of P526.6 billion.

Data showed motor vehicle loans grew by a slower 18.1 percent to P278.59 billion in July as consumers bought ahead of the impending imposition of higher excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

On the other hand, credit card loans grew faster at 22.9 percent to P256.18 billion, while salary loans were steady at P68.25 billion.

“The contraction in salary-based general purpose consumption loans and other types of household loans, as well as the slower growth in motor vehicles offset the faster expansion in credit card loans in July,” Espenilla said.

Meanwhile, the BSP also reported the growth of liquidity in the financial system slowed to 11 percent to P11 trillion in July from P10 trillion in July last year and remains broadly in line with the central bank’s prevailing outlook for inflation and economic activity.

“The BSP will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” Espenilla said.

This article first appeared on www.PhilStar.com