Bank lending expands by 9.7 percent in April 2023

Preliminary data indicated that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the Bangko Sentral ng Pilipinas (BSP), grew by 9.7 percent year-on-year in April 2023 from 10.2 percent (revised) in March.

On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, went up marginally by 0.6 percent.

Outstanding loans to residents, net of RRPs, increased by 9.6 percent in April from 10.2 percent (revised) in March.

Outstanding loans for production activities grew by 8.3 percent in April from 9.0 percent (revised) in the previous month, largely driven by the continued rise in lending to key sectors, particularly electricity, gas, steam, and airconditioning supply (12.4 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (10.3 percent); manufacturing (9.3 percent); information and communication (19.0 percent); and real estate activities (4.5 percent).

Meanwhile, consumer loans to residents expanded at a faster rate of 22.3 percent in April from 21.8 percent (revised) in March, driven by the increase in credit card and motor vehicle loans.

Outstanding loans to non-residents^[1] also rose by 12.2 percent in April, albeit slower than the 13.1-percent (revised) increase in the previous month.

The sustained expansion in bank lending activity suggests that domestic liquidity remains sufficient to support economic activity.

Looking ahead, the BSP will continue to ensure that domestic liquidity and credit dynamics are consistent with the prevailing stance of monetary policy, in keeping 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.