Salary loan use zoomed 21.7% in September—BSP

Salary-based general-purpose consumption loans (SGPCL) con­tinue to expand bank lending, according to the latest data from the Bangko Sentral Ng Pilipinas (BSP).

Formerly “salary loans” and renamed SGPCL by the BSP, this type of borrowing has driven loans for household consumption to rise by 21.7 percent in September from 20.3 percent last August, the BSP reported.

The BSP has monitored the upswing of loans under SGPCL with the first quarter report of the BSP reporting that SGPCLs extended by universal and com­mercial banks (U/KBs) and thrift banks (TBs), inclusive of non-bank subsidiaries, increased by 68.1 percent to P104.3 billion as of end-December 2015 from the P62.1 billion a year ago.

The BSP reported that in September, the consumption loan sector expanded due to the sustained growth in salary-based general-purpose loans, and motor vehicle loans as well as expansion in credit card which offset the de­cline in other types of household loans.

The BSP also reported that outs tanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 17.7 percent in Septem­ber from 17.3 percent in August.

Bank lending inclusive of RRPs increased by 16.4 percent from 15.9 percent in the previous month.

On a month-on-month sea­sonally-adjusted basis, commer­cial bank lending for loans net of RRPs and loans inclusive of RRPs increased by 0.9 percent and 0.8 percent, respectively.

Loans for production activ­ities, comprising more than 80.0 percent of banks’ aggregate loan portfolio in September, grew by the same rate of 17.3 percent as in the previous month.

The BSP said that the sus­tained growth in production loans was driven primarily by increased lending to the following sectors: real estate activities (19.2 percent); electricity, gas, steam and air con­ditioning supply (27.5 percent); wholesale and retail trade, repair of motor vehicles and motorcy­cles (13.2 percent); manufacturing (12.5 percent); and, information and communication (37.2 per­cent).

Bank lending to other sec­tors likewise expanded during the month, except for mining and quarrying (-3.5 percent); and, pub­lic administration and defense, compulsory social security (-5.9 percent).