BANK LOANS UP 6.1% TO 2.08 TRILLION AS OF FEBRUARY
MANILA, APRIL 9, 2010 (STARS) By Lawrence Agcaoili - Bank lending grew at a faster pace in February compared to a month earlier due to the improvement in domestic economic activity, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said yesterday.
Tetangco said bank lending excluding reverse repurchase placements with the BSP went up by 6.1 percent to P2.084 trillion in February, faster than the five percent growth registered in January.
In January, bank lending stood at P1.963 trillion.
“Improving domestic economic activity contributed to the pick-up in bank lending,” Tetangco stressed.
Lending for production improved by 5.8 percent in February from a 4.4- percent growth in January. Total loans to the productive sectors amounted to P1.862 trillion in February from P1.76 trillion in the same period last year and accounted for about 89 percent of the total outstanding loans.
The growth, according to the BSP, was driven mainly by lending to the real estate, renting and business services that expanded by 17.3 percent to P315.67 billion; transportation, storage, and communication with 34 percent to P146.67 billion; and agriculture, hunting and forestry with 9.3 percent to P320.19 billion.
Other sectors that posted growth include wholesale and retail trade with 8.8 percent to P223.6 billion; hotels and restaurants with 46.6 percent to P29.73 billion; public administration and defense with 9.6 percent to P67.72 billion; mining and quarrying with 63.3 percent to P8.74 billion; electricity, gas and water with two percent to P147.4 billion; and health and social work with 11.2 percent to P11 billion.
However, loans to the manufacturing sector continued to contract but at a slower rate of 6.4 percent in February from 15.5 percent in the January. Loans to manufacturers reached P318.05 billion in February from P339.77 billion in the same month last year.
Furthermore, loans to the construction sector retreated at a slower pace of 1.4 percent in February from 3.7 percent in January.
The BSP also reported that loans for household consumption continued to post a double-digit growth at 12 percent in February, slightly lower than the 12.5 percent growth posted in January. Loans for household consumption reached P173.53 billion in February from P154.99 billion in the same month last year.
Auto loans jumped 30.2 percent to P47.02 billion in the February from P35.63 billion in the same month last year while credit card loans went up by 8.2 percent to P111.1 billion from P102.67 billion.
Tetangco said banks could take advantage of the improved financial market conditions to further strengthen their capital base, and in the process increase their capacity to extend credit to support a self-sustaining and durable economic growth.
The central bank’s Monetary Board has slashed key policy rates by 200 basis points from December 2008 to July last year as part of easing measures to boost the country’s slackening domestic economy.
This brought the overnight borrowing rate to a record low of four percent from 6.0 percent and the overnight lending rate to 6.0 percent from eight percent.
Economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) see the country’s domestic output as measured by the gross domestic product (GDP) expanding between 2.6 percent and 3.6 percent this year after slackening to 0.9 percent last year from 3.8 percent in 2008 due to the global economic meltdown.
Chief News Editor: Sol Jose Vanzi
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