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March 05, 2024

Bank loans rise 7% in December

Bank loans grew by 7.0% year-on-year in December 2023, according to preliminary data from the Bangko Sentral ng Pilipinas.

The BSP said outstanding loans of universal and commercial banks (U/KBs), excluding reverse repurchase (RRP) placements with the BSP, increased by the same rate as in November 2023. On a month-on-month seasonally-adjusted basis, these loans went up by 0.3%.

Loans to residents, excluding RRPs, increased 7.3% in December compared to 7.4% in the previous month, while loans to non-residents decreased 2.8% in December from a decline of 5.0% in November.

Outstanding loans for production activities rose 5.5% in December compared to 5.7% in November.

This growth was driven by lending expansions in key industries such as real estate activities (10.9%); wholesale and retail trade, and repair of motor vehicles and motorcycles (7.2%); and electricity, gas, steam, and air conditioning supply (6.2%).

Consumer loans to residents remained strong at 23.5% percent in December, following November’s 23.6%, attributed to the rise in credit card loans, motor vehicle loans, and salary-based general-purpose consumption loans.

Meanwhile, domestic liquidity (M3) grew by 5.9 percent year-on-year to about P17.4 trillion in December 2023 from 7.0 percent in November 2023. On a month-on-month seasonally-adjusted basis, M3 increased 0.4 percent.

Domestic claims expanded by 9.0 percent year-on-year in December from 9.7 percent in the previous month. Claims on the private sector grew by 8.5 percent from 8.3 percent (revised) with the sustained expansion in bank lending to non-financial private corporations and households.

Net claims on the central government rose 14.2 percent from 17.3 percent with the decline in the deposits of the national government with the BSP.

Net foreign assets (NFA) in peso terms went up 4.3 percent year-on-year in December from 3.2 percent in November. The BSP’s NFA grew 7.4 percent. Meanwhile, the NFA of banks contracted on account of lower interbank loans receivable.

The BSP said it would ensure that liquidity and bank lending conditions remain aligned with its price and financial stability objectives.

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