Bank lending expands by 4.6 percent, year-on-year, in December 2021

Preliminary data show that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the Bangko Sentral ng Pilipinas (BSP), grew at a faster rate of 4.6 percent year-on-year in December from 4.0 percent in November.

Credit activity continued to improve due to a more favorable economic outlook from businesses and households amid the sustained rollout of COVID-19 vaccines and the easing of community restrictions during the month.

On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, increased by 0.4 percent.

Outstanding loans to residents, net of RRPs, increased by 4.7 percent in December from 4.1 percent in the previous month, driven by the faster growth in loans for production activities.

Outstanding loans for production activities went up by 5.8 percent in December from 5.4 percent in November given the continued rise in lending for real estate activities (9.1 percent); information and communication (27.3 percent); manufacturing (9.4 percent); financial and insurance activities (9.9 percent); and transportation and storage (9.1 percent). Outstanding loans to other industries, mainly activities of households as employers; undifferentiated goods-and-services-producing activities of private households for own use (-21.9 percent), fell at a slower pace in December.

Meanwhile, consumer loans to residents declined at a softer rate of 5.7 percent in December from a 7.1-percent decrease in the previous month amid the year-on-year rise in credit card loans.

Furthermore, outstanding loans to non-residents^[1] went up by 2.5 percent in December from 0.4 percent in November.

Looking ahead, the BSP will continue to monitor credit dynamics to ensure that its monetary policy settings remain appropriate amid signs of economic recovery, consistent with its price and financial stability mandates.

^[1] Outstanding loans to non-residents include loans by UKB’s foreign currency deposit units (FCDUs) to non-residents.