Preliminary data show that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the Bangko Sentral ng Pilipinas (BSP), increased at a faster rate of 3.5 percent year-on-year in October from 2.7 percent in September.
The continued recovery in outstanding loans of U/KBs reflects the expansion in business activity amid easing quarantine restrictions, declining COVID-19 cases, and increasing vaccinations. On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, rose by 0.6 percent.
Outstanding loans to residents, net of RRPs, grew by 3.7 percent in October from 3.2 percent in September, due mainly to the continued increase in loans for production activities.
Outstanding loans for production activities went up by 4.9 percent in October from 4.4 percent in September, supported by the growth in loans for real estate activities (7.6 percent); information and communication (27.7 percent); financial and insurance activities (11.5 percent); and manufacturing (5.0 percent).
Meanwhile, the decline in ooutstanding loans to other industries such as agriculture, forestry and fishing (-6.8 percent) tempered the overall increase in outstanding loans for production.
Consumer loans to residents also fell at a slower rate of 7.2 percent in October following a 7.8-percent decrease in the previous month due to the slight year-on-year increase in credit card loans and the slower contraction in salary-based general-purpose loans.
Meanwhile, outstanding loans to non-residents[i] decreased by 3.7 percent after declining by 12.0 percent in September.
In conjunction with the National Government’s fiscal and health interventions, the BSP will keep a patient hand in providing policy support in order to enable a sustainable recovery in domestic demand.
Looking ahead, the BSP will continue to prioritize providing the appropriate monetary policy support for the overall economy, in line with the BSP’s price and financial stability mandates.
[i] Outstanding loans to non-residents include loans by UKB’s foreign currency deposit units (FCDUs) to non-residents.