Bank loans post fastest growth in 21 months

Bank loans recorded the fastest growth in 21 months, while domestic liquidity expanded faster in November, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary data from the BSP showed that bank lending by universal and commercial banks (U/KBs) grew 11.1% in November, the highest since 13.7% in December 2022.

Outstanding loans issued by U/KBs totaled P12.67 trillion ($225 billion) in November, up from P12.50 trillion in October and P11.40 trillion in November 2022.

Loans for production activities rose 9.8% in November from 9.1% in October.

The BSP attributed this to sustained lending increases in wholesale and retail trade, repair of motor vehicles and motorcycles; electricity, gas, steam, and air-conditioning supply; and financial and insurance activities.

Consumer loans to residents, meanwhile, rose 23.3%, driven by increases in credit card and motor vehicle loans.

In a separate report, the BSP said domestic liquidity grew at a faster pace of 7.7% to P18.1 trillion.

In October, domestic liquidity grew 5.4%.

Domestic claims increased 10.8% in November from 10% in the previous month.

The BSP said claims in the private sector expanded 11.7% from 11.8% due to continued lending expansion to non-financial private corporations and households.

Net claims on the central government grew 9.2% from 8.4% in October, partly due to continued borrowing by the national government.

Net foreign assets (NFA) in peso terms rose 9.8% in November from 11.3% in October.

The BSP's NFA grew 12.8%, reflecting the increase in gross international reserves, while the NFA of banks contracted, mainly due to higher bills payable and bonds payable.

"Looking ahead, the BSP will ensure that domestic liquidity and lending conditions are in line with its price and financial stability mandates," the central bank said.