Philippine Bank Lending Records 7.7% Year-on-Year Growth in July

Loans from universal and commercial banks in the Philippines experienced a year-on-year growth of 7.7% in July, according to recent preliminary data. While this represents a slight decrease from the 7.8% growth reported in June, the figure is still positive for the banking industry.

On a month-to-month seasonally-adjusted basis, these loans increased by 0.6%, in line with the performance seen in June, according to data from the Bangko Sentral ng Pilipinas (BSP), the country’s central bank.

A more detailed breakdown of the figures highlights a consistent 7.7% rise in outstanding loans to residents, down from 7.9% in June. Notably, loans for production activities experienced a surge of 6.2% in July, following a 6.3% increase the previous month. This increase in loans for production activities was driven by rising demand from critical sectors such as electricity, gas, steam, and air conditioning supply, wholesale and retail trade, repair of motor vehicles and motorcycles, real estate, information and communication, and transportation and storage.

On the consumer front, loans to residents in July grew by an impressive 22.6%, albeit slightly less than June’s growth of 23.7%. This increase was primarily driven by the growing demand for credit card and motor vehicle loans.

In an international context, lending to non-residents saw significant growth, with outstanding loans expanding by 6.2% in July, compared to the 4.8% growth observed in June.

Despite these positive growth figures, the overall pace of bank lending has somewhat slowed, which reflects the BSP’s firm monetary policy stance.

Looking ahead, the BSP remains committed to monitoring and maintaining domestic liquidity and credit dynamics in order to align with its primary goals of price and financial stability.

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