RP bank lending slows down
December 11, 2009 10:57 pm
MANILA, Dec. 11 – Lending activities of banks continue to slide with the net of banks’ reverse repurchase (RRP) placements with the central bank slowed at 4.7 percent last October from the previous month’s 5.9 percent.
The Bangko Sentral ng Pilipinas (BSP) on Friday reported that total outstanding loans of commercial banks, including RRPs, also slowed after it stood at 2.6 percent from last September’s 6.1 percent.
Total loans extended by commercial banks last October totaled to P2.19 trillion from the previous month’s P2.18 trillion.
“The modest expansion in bank lending reflects reduced demand due to the still weak economic activity,” BSP Governor Amando Tetangco Jr. said.
Loans extended for household consumption slowed to 3.9 percent last October from the previous month’s 6.9 percent due to lower growth in auto loans and credit card lending as well as negative growth in other types of consumer loans.
BSP data showed that growth of credit card loans was at 3.6 percent last October from the previous month’s 7.1 percent while growth in auto loans also slid to 23.4 percent from 29.1 percent last September.
Also, the other type of loans registered a negative growth of 27.4 percent from the previous month’s –28.7 percent.
Loans for the production sectors also slowed to 4.2 percent in October this year from the previous month’s 5.2 percent “as the expansion of lending to some productive sectors was pulled down by the contraction in other sectors, led by manufacturing.”
BSP said the growth drivers to the expansion in the loans for the production sectors are the real estate, renting and business services at 14 percent; electricity, gas and water, 26.8 percent; transportation, storage and communication, 26.7 percent; agriculture, hunting and forestry, 8.8 percent; financial intermediation, 19.9 percent, public administration and defense, 32.4 percent; other community, social and personal services, 8.6 percent; and hotels and restaurants, 31.5 percent. All these account for about 55 percent of the total.
On the other hand, growth of loans to the manufacturing sector, which has a share of 15 percent to the total, was at –19 percent “due to the still weak global demand for exports with the sluggish global economic recovery.”
Tetangco, however, noted that contraction in the manufacturing loans last October was lower than the previous month’s 20.5 percent.
He said the central bank's commitment “to ensure that liquidity conditions remained supportive of the spending and investment needs of firms and households with a view to promoting economic growth and preserving price stability.” (PNA)
RMA/JS
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