Bank lending grew 14.9% in June to P2.976T

Wednesday, 08 August 2012 19:26 Jun Vallecera / Reporter

BANK lending, often an indication of an economy on the up and up, posted a slightly faster growth rate averaging 14.9 percent in June from 14.7 percent in May to P2.976 trillion.

This marked the 18th consecutive month when bank loans grew in double digits.

The amount and rate of growth excluded funds the Bangko Sentral ng Pilipinas (BSP) borrowed from the banks in the form of reverse repurchase placements as part of its monetary-management functions.

If those funds were added up, bank lending grew at a slower pace, averaging 12.2 percent from 13.6 percent the previous month to P3.193 trillion.

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The bulk of those loans was for production purposes or for those extended manufacturers, wholesalers and retailers, real-estate companies, mining companies, banks and financial institutions, among other companies.

Production loans for the period grew by 15.1 percent to P2.714 trillion and compared favorably against consumption loans which grew by 15.8 percent to 238.488 billion, or slower than a month earlier, when consumption loans, grew a full-percentage point faster to P235.66 billion.

“The continued growth in bank lending underpins the BSP’s view that domestic demand remains firm and would lend support to the economy amid weakening global economic conditions.

“The BSP will continue to monitor liquidity conditions to ensure that credit activity remains supportive of overall economic growth while remaining consistent with the BSP’s price- stability objective,” said BSP Gov. Amando M. Tetangco Jr. Liquidity conditions in the economy, more formally known as M3 or domestic liquidity, grew by another 7.1 percent in June to P4.7 trillion, indicating money supply conditions considered sufficient to address loan demand.

“The steady growth in domestic liquidity indicates that overall liquidity conditions remain sufficient to support the economy’s growth requirements. The BSP will continue to monitor close monetary conditions to ensure that liquidity in the financial system remains supportive of economic activity in line with the BSP’s objective of maintaining price stability,” Tetangco said.