Bank lending jumps 11% to fuel business growth

Bank lending continued to expand in August, with loans from universal and commercial banks rising 11 percent year-on-year as domestic liquidity also posted strong growth, the Bangko Sentral ng Pilipinas (BSP) said last week.

Outstanding loans to residents grew 11.3 percent during the month, reflecting continued expansion in bank credit despite tighter monetary conditions.

Business loans increased 10.6 percent in August, with much of the credit going to the real estate, electricity, gas, steam and air-conditioning, wholesale and retail trade, financial and insurance, manufacturing, information and communication, and transportation and storage sectors.

Growth in consumer loans, however, eased during the month due mainly to slower expansion in credit card and motor vehicle loans.

Domestic liquidity, or M3, likewise grew 11.2 percent year-on-year to ₱20.7 trillion in August.

The BSP said it will continue to ensure that domestic liquidity conditions remain consistent with its monetary policy stance.

The central bank raised its benchmark interest rates by 25 basis points to 5 percent in August amid elevated inflation, even as bank lending and liquidity continued to grow.