MANILA, Philippines - Bank lending rose at its fastest pace in more than two years in May as more borrowings were made for activities that continue to support the strong domestic economy, the Bangko Sentral ng PIlipinas said yesterday.
Central bank data showed lending by universal and commercial banks – less their placements with the BSP – went up 21.1 percent to P3.95 trillion in May from a year ago, the fastest growth after the 22.5 percent expansion in November 2011.
Together with placements with the BSP, lending climbed 19.6 percent to P4.213 trillion, also the fastest following August 2011’s 24.8 percent.
“The continued broad-based growth in bank lending suggests solid growth prospects for the domestic economy,” the BSP said.
The Philippine economy expanded by a slower-than-expected 5.7 percent in the first quarter but the government still hopes it would grow by 6.5 to 7.5 percent this year from the stellar 7.2 percent in 2013.
The central bank said loans for production activities, which made up four-fifths of the total loan portfolio, rose 19.1 percent to P3.539 trillion in May from P2.971 trillion in the same month last year.
These were mainly extended for real estate (P712.434 billion); manufacturing (P630.469 billion); wholesale and retail trade (P571.816 billion); electricity, gas, and water (P416.265 billion); and financial intermediation (P330.999 billion).
Consumer loans, meanwhile, jumped 11.2 percent to P292.829 billion in May from P263.235 billion last year.
Credit card loans continued to make up bulk of the household borrowings at P155.829 billion, while auto loans summed up to P99.538 billion. Other consumer loans climbed 34 percent to P37.462 billion.
“Going forward, the BSP will take appropriate actions necessary to ensure that credit and liquidity conditions remain consistent with its price and financial stability objectives,” the central bank said.