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October 01, 2022

Real estate, manufacturing, households boost credit portfolio of big banks

Real estate, manufacturing, and households fueled a double-digit growth in the lending portfolio of universal and commercial banks for the month of April, the Bangko Sentral ng Pilipinas (BSP) reported.

Latest data released by the BSP showed bank lending grew at a faster rate of 10.1 percent to P9.62 trillion in April from P8.75 trillion in the same month last year amid improving credit conditions on the back of the country’s improving economy.

“Credit conditions continue to improve as economic activity rebounds amid a manageable domestic COVID-19 caseload,” the BSP said in a statement.

The government gradually eased mobility restrictions by lowering the classification of the National Capital Region (NCR) and nearby areas to Alert Level 1 in March from Alert Level 3 in January.

Likewise, some companies and households borrowed ahead of the expected interest rate liftoff by the central bank’s Monetary Board.

Last May 19, the BSP raised interest rates for the first time in more than three years or since November 2018 after it delivered a 25 basis points hike to curb rising inflationary pressures.

“A steady improvement in overall credit activity and stable financial market conditions have allowed the BSP to continue rolling back its pandemic induced liquidity interventions,” the central bank said.

Latest data showed that the real estate sector posted a strong 18.7 percent jump to P2.1 trillion and accounted for 21.3 percent of the total disbursements, while lending to the wholesale and retail trade as well as repair of motor vehicles and motorcycles went up by 7.5 percent to P1.13 trillion for a share of 11.5 percent.

Loans extended to the manufacturing sector grew at a faster rate of 12.4 percent to P1.1 trillion for a share of 11.1 percent.

Likewise, loans to the electricity, gas, steam and air-conditioning supply sector inched up by 0.6 percent growth to P1.06 trillion for a 10.7 percent share.

The central bank said that consumer loans recorded a faster growth of 6.7 percent to P879.4 billion for a share of 8.9 percent of the total loans as credit card loans booked a strong 16 percent growth to P453.98 billion.

Motor vehicle loans declined by 3.1 percent to P331.04 billion in April.

“Looking ahead, the BSP will continue to watch closely evolving credit and liquidity conditions to ensure that appropriate level of liquidity is available to nurture the momentum of economic recovery, while containing inflation pressures,” the central bank said in a statement.

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