otal outstanding loans of commercial banks, net of banks’ reverse repurchase (RRP) placements with the BSP, expanded in October at a faster pace of 15.8 percent relative to the growth of 13.5 percent in September. Bank lending inclusive of RRPs grew by 14.2 percent, the same rate as in the previous month. Commercial bank loans have been growing at double-digit rates since January 2011. On a month-on-month seasonally-adjusted basis, commercial bank lending in October increased by 2.1 percent for loans net of RRPs and by 1.6 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than four-fifths of banks’ aggregate loan portfolio—grew by 16.4 percent in October from 13.9 percent in the previous month. Meanwhile, the growth of consumer loans eased slightly to 13.9 percent from 14.6 percent in September due mainly to the slowdown in auto loans.
The expansion in production loans was driven primarily by increased lending to the following sectors: wholesale and retail trade (by 46.5 percent); real estate, renting, and business services (28.6 percent); financial intermediation (31.8 percent); manufacturing (14.6 percent); transportation, storage, and communication (28.2 percent); public administration and defense (49.3 percent); and electricity, gas, and water (13.8 percent). Meanwhile, declines were observed in lending to mining and quarrying (-39.4 percent) and agriculture, hunting, and forestry (-45.7 percent).
The recent rounds of monetary policy easing, alongside the favorable outlook for domestic demand, are expected to continue to support bank lending in the months ahead. Going forward, the BSP will continue to monitor liquidity conditions to ensure that credit activity remains supportive of overall economic growth while remaining consistent with the BSP’s price stability objective.
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