Philippine bank lending in January 2024 surged by 7.8 percent compared to the same month the previous year, signaling a robust acceleration from the 7.1 percent growth recorded in December 2023, according to preliminary data released on March 8, 2024.
This increase in lending by universal and commercial banks, excluding reverse repurchase (RRP) placements with the Bangko Sentral ng Pilipinas (BSP), underscores a strengthening financial environment.
On a month-on-month basis, seasonally adjusted figures show that outstanding loans from universal and commercial banks, net of RRPs, increased by 0.8 percent.
Loans to residents, excluding RRPs, mirrored this annual growth rate of 7.8 percent, marking an improvement from 7.4 percent in the preceding month.
Notably, loans to non-residents experienced a sharp rebound, growing by 9.8 percent in January after a 2.9 percent decline in December.
The growth in lending was primarily fueled by production activities, which saw a 5.9 percent increase in January from 5.6 percent in December.
This growth was significantly supported by increased loans to key sectors including real estate activities, which jumped by 11.4 percent; wholesale and retail trade, along with repair of motor vehicles and motorcycles, at 7.4 percent; and electricity, gas, steam, and air conditioning supply, at 7.3 percent.
Additionally, transportation and storage, as well as construction sectors, saw remarkable growth rates of 18.2 percent and 13.6 percent, respectively.
Consumer loans to residents also showed significant momentum, with a 25.2 percent surge in January, up from 23.9 percent in December. This rise was largely driven by continued increases in credit card and motor vehicle loans, alongside salary-based general-purpose consumption loans.
Looking forward, the BSP has committed to ensuring that liquidity and bank lending conditions are aligned with its overarching goals of price and financial stability, indicating a proactive approach to managing the financial sector’s growth and stability.
