— Reuters
MANILA: Bank lending posted its fastest growth in almost two years in November 2024 due to a bigger appetite for business loans amid the ongoing rate cutting cycle of the Bangko Sentral ng Pilipinas (BSP).
Preliminary data showed outstanding loans of big banks, excluding their lending with each other, expanded by 11.1% year-on-year in November to 12.68 trillion pesos in November, beating the 10.6% loan growth in October, the BSP reported last Friday.
The credit expansion in November was the fastest since the 13.7% recorded in December 2022. Dissecting the BSP’s report, an uptick in demand for business loans offset the slower, but still strong, bank lending to consumers.
This, in turn, translated to higher money supply circulating in the economy. A separate BSP report showed that M3, a measure of domestic liquidity, grew by 7.7% to about 18.1 trillion pesos in November from 5.4% in the previous month.
The central bank said loans to companies to fund various production activities went up by 9.8% to 10.81 trillion pesos, the biggest gain in two months and surpassing the 9.1% expansion recorded in October.
Bank lending was notably brisk for firms engaged in wholesale and retail trade at 9.1%, as the start of the holiday season might have prompted these businesses to ramp up production to meet the typical surge in demand.
Credit growth was likewise strong for industries like electricity, gas, steam and air-conditioning supply (9.6%) and financial and insurance activities (4.4%).
Meanwhile, bank lending to households grew by 23.3% in November to P1.54 trillion, slower than the 24% uptick in the preceding month.
While the expansion was still relatively strong, figures showed this was the lowest consumer loan growth since October 2023.
The BSP reported that credit card loans grew at a slower pace of 26.5% from 27.7% before. Expansion of salary-based general consumption loans also eased to 15% from 18.4% previously.
As it is, credit growth is expected to further gain momentum in the coming months as the central bank proceeds with its easing cycle. — The Philippine Daily Inquirer/ANN
