Bank loan growth slows to 17.5% in Dec

Reuters

Posted at Feb 18 2009 06:52 PM | Updated as of Feb 19 2009 02:52 AM

Bank lending in the Philippines continued to grow in December although at a slower pace, but a series of monetary easing steps should eventually help boost credit growth, the central bank said on Wednesday.

Bank lending, including overnight placements with the central bank, expanded 17.5 percent in December over the year ago period, compared with 22.9 percent in November, the central bank said in a statement.

Excluding the reverse repurchase agreements with the central bank, lending grew 20.5 percent in December from a year earlier, lower than the previous month's 21.3 percent.

"The central bank's monetary easing moves in previous months are expected to support credit growth in the months ahead to help alleviate the effects of the global financial crisis on the domestic economy," Governor Amando Tetangco said.

Loans for production activities rose 18.3 percent in December, steady from the previous month's 18.4 percent.

Lending to consumers, which includes credit cards, grew 13.4 percent December, slower from 20.6 percent in November.

The central bank has reduced policy rates by a total 1 percentage point in the last two months after inflation steadily came down from a near 17-year peak of 12.5 percent in August.

The central bank's overnight borrowing rate now stands at 5 percent and 7 percent for overnight lending.

Analysts expect the monetary authority to slash rates by another half a percentage point at its March 5 meeting to support economic growth.