Bank lending grows 12.2% in February

Bank lending sustained double-digit growth in February while domestic liquidity also expanded, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) last week.

Outstanding loans issued by universal and commercial banks (U/KBs) climbed by 12.2% year-on-year in February, slightly easing from the 12.8% growth recorded in January. The total loan portfolio reached P13.02 trillion, a marginal increase from P13.01 trillion in the previous month and a significant rise from P11.61 trillion in the same period last year.

Lending to residents, excluding placements in reverse repurchase agreements (RRPs), increased by 12.6%, while loans to non-residents saw a decline of 3.2%.

Loan growth was driven primarily by the production sector, which registered an 11.2% increase. Notable contributors included electricity, gas, steam, and air-conditioning supply (21.5%); wholesale and retail trade, including repair of motor vehicles and motorcycles (13.7%); manufacturing (0.9%); construction (12.7%); and transportation and storage (20.6%).

Consumer loans to residents surged 24.1%, supported by increased borrowing through credit cards and motor vehicle financing.

In a separate report, the BSP said domestic liquidity (M3) expanded by 6.3% to reach PHP18 trillion in February, slightly lower than January’s 6.8% growth.

Domestic claims rose by 10.1%, with claims on the private sector up 12.3% on the back of continued lending to non-financial corporations and households.

Meanwhile, net claims on the central government moderated to 5.9% from 7.4%, attributed to lower deposits of the National Government with the BSP compared to the previous year.

The BSP also reported a 5.8% rise in net foreign assets (NFA) in peso terms. The central bank’s NFA expanded by 8.9%, boosted by higher gross international reserves. However, the NFA of banks contracted due to increased liabilities from foreign currency-denominated bills and bonds.

“The BSP will continue to ensure that domestic liquidity conditions remain consistent with the prevailing stance of monetary policy, in line with its price and financial stability objectives,” the central bank said.