After slowing down for three straight months, credit growth picked up slightly in March as the aggressive rate hikes delivered by the Bangko Sentral ng Pilipinas (BSP) went into bank lending.
This was based on preliminary data released by the central bank, which revealed that loans disbursed by both universal and commercial banks had grown by 10.1 percent in March compared to just 10 percent in February.
A stack of old and new Philippine money (IMAGE CREDIT: https://depositphotos.com)
The rise in credit card loans slowed at 27.9 percent to P570.36 billion in March compared to the P446.07 billion recorded in the same month last year after the BSP raised the cap on interest rate charges to three percent per month from the previous two percent.
Loans released by big banks also amounted to P10.76 trillion by end-March, which is P984 billion higher than the P9.78 trillion disbursed in the same month last year.
“Sustained growth in credit is supported by sound Philippine banking system conditions,” the BSP stated in a press release. “Looking ahead, the BSP will continue to monitor domestic liquidity dynamics to ensure that credit conditions remain in line with its price and financial stability mandates.”
Report breakdown
For the month of March, loans to production activities likewise increased at a slightly faster rate of 8.9 percent to P9.4 trillion from P8.63 trillion in the same month last year and accounted for 87.3 percent of the total disbursements.
Disbursements to the real estate sector accelerated by 4.2 percent to P2.18 trillion, followed by the wholesale and retail trade, repair of motor vehicles and motorcycles, with a faster increase of 10.5 percent to P1.25 trillion.
Both manufacturing, as well as electricity, gas, steam and air-conditioning supply sectors, registered higher growth in loan disbursements with P1.17 trillion each for an identical share of 10.9 percent.
The financial and insurance sectors also registered a 13.1-percent increase to P1.02 trillion and accounted for 9.5 percent of the total loan disbursements.
The BSP also reported that the jump in consumer loans was sustained at 21.3 percent to P1.05 trillion in March for a share of 9.3 percent amid the series of aggressive rate hikes by monetary authorities to fight inflation and stabilize the peso.
Auto loans inched up by 0.5 percent to P334.41 billion from P332.59 billion, while salary-based general-purpose consumption loans jumped by 67 percent to P123.82 billion and other loans surged by 63 percent to P23.73 billion.
It also reported a six-percent increase in money supply or M3 to P16.18 trillion in March from P15.27 trillion in thae same month last year.