The Market Monitor Minding the Nation's Business
The Philippines is the only country within the Association of Southeast Asian Nations (ASEAN) showing an improving trend in credit growth, according to a report by Bank of America (BofA) Global Research.
BofA noted that the Philippines is the only ASEAN nation exhibiting an upward shift, with credit growth accelerating to 9-10%. The most recent data indicates a slight improvement from current levels, signaling positive momentum for the country’s credit market.
The report attributed the shift from a declining to an improving trend to factors such as increased import growth and a higher net sales index. However, this positive momentum was somewhat tempered by a decrease in auto sales.
BofA’s ASEAN Credit Growth Indicators aim to identify key trends and turning points in credit growth across the ASEAN-5 countries—Singapore, Malaysia, Indonesia, Thailand, and the Philippines.
These indicators are used to predict how loan growth in these countries is likely to evolve over the next one to two quarters.
The report also revealed that credit growth trends in other ASEAN nations are mixed, with Singapore and Thailand showing flat growth, while Malaysia and Indonesia are experiencing declines.
Data from the Bangko Sentral ng Pilipinas (BSP) supports this positive outlook for the Philippines.
As of September, outstanding loans of universal and commercial banks, excluding reverse repurchase (RRP) placements, grew by 11%. This represents a slight acceleration from the 10.7% growth recorded in August.