UMVA has learned that Philippine banks’ lending activities surged in April, with loan growth hitting its fastest pace in nine months, according to data from the central bank.
The total outstanding loans of universal and commercial banks, net of reverse repurchase agreements, rose by 11.4% year on year in April to P14.755 trillion, up from P13.249 trillion. This marked a significant acceleration in lending, with April’s growth rate outpacing the 11.1% rise seen in March.
On a seasonally adjusted basis, bank lending climbed by 2% month on month, reflecting banks’ expectations of steady loan demand from businesses and households. A recent survey by the central bank found that 53.8% of banks polled saw steady loan demand from businesses for the second quarter of the year, while 52.9% anticipated steady credit demand from households.
Lending to residents grew by 11.8% to P14.462 trillion, while loans extended to nonresidents contracted by an annual 7.9% to P293.112 billion. The decline in nonresident loans was steeper than the 5.9% drop logged in the prior month.
Banks lent out a total of P12.463 trillion for residents’ production activities, 10.7% higher than the P11.26 trillion granted last year. This accounted for the bulk of banks’ loans to residents during the period and was driven by a 25.8% year-on-year expansion in lending for the electricity, gas, steam, and air-conditioning supply sector.
Consumer loans to residents jumped by 19.6% to P1.999 trillion, driven by a 26.6% increase in credit card loans to P1.247 trillion. Lending for motor vehicles grew by 11.6% to P539.824 billion, while loans for general-purpose salaries rose by 6.1% year on year to P170.236 billion.
The country’s money supply also rose further in April, with domestic liquidity (M3) increasing by 12.2% to P20.348 trillion. This was driven primarily by the continued expansion in borrowings to nonfinancial private corporations and households.
Domestic claims, which include those from private and government sectors, came in 12.7% higher to P23.366 trillion. Net claims on the central government increased by 15.1% in April, driven mainly by higher outstanding government securities and lower deposits with the central bank and banks.
The central bank’s net foreign assets (NFA) stood at P7.275 trillion in April, up 8.9% annually. The central bank will continue to ensure that domestic liquidity conditions remain consistent with its price and financial stability objectives.
