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Keisha Ta-Asan - The Philippine Star
February 13, 2025 | 12:00am
As interest rates ease
MANILA, Philippines — Bank lending in the country surged to its highest level in two years, expanding by 12.2 percent in December 2024, as robust consumer and business loan demand fueled credit growth.
Initial data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding loans of universal and commercial banks grew faster than the 11.1-percent expansion in November.
This was also higher than the 7.1 percent growth seen in December 2023. It marked the highest in two years, or since the 13.7 percent expansion in December 2022.
Loans to residents increased by 12.4 percent in December from 11.4 percent in the previous month. Meanwhile, loans to non-residents expanded at a faster pace, posting a 5.7-percent growth, compared to 3.9 percent in November.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the growth in credit activity followed the 75 basis points of cumulative rate cuts implemented by the BSP last year.
Ricafort said that stable inflation could justify further rate cuts in the coming months, which would lower borrowing costs, although with some lag effects.
As of end-2024, loan releases for production activities grew by 10.8 percent to P11.22 trillion, up from 9.8 percent in November. In 2023, the loan to this sector grew by just 5.6 percent.
Specifically, loans to real estate activities got the biggest share at P2.65 trillion, up 9.2 percent from a year ago. It was 20.2 percent of the aggregate.
The wholesale and retail trade, repair of motor vehicles and motorcycles followed at P1.51 trillion and electricity, gas, steam and air-conditioning sector at P1.45 trillion.
Meanwhile, loans to the manufacturing sector stood at P1.37 trillion.
On the other hand, consumer loans increased by 25 percent to P1.59 trillion in end-December for a 12.1-percent share of the total loans disbursed by big banks.
This was mainly driven by the 29.4-percent surge in credit card loans to P934.55 billion from P722.46 billion.
Motor vehicle loans also zoomed by 19.5 percent to P454.37 billion from P380.14 billion, while salary-based general-purpose consumption loans rose 16.5 percent to P157.94 billion from P135.52 billion.
“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability objectives,” the central bank said.
In a separate data, the BSP reported a 7.7-percent increase in domestic liquidity to about P18.8 trillion in end-December, the same pace recorded in end-November.
As interest rates ease
MANILA, Philippines — Bank lending in the country surged to its highest level in two years, expanding by 12.2 percent in December 2024, as robust consumer and business loan demand fueled credit growth.
Initial data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding loans of universal and commercial banks grew faster than the 11.1-percent expansion in November.
This was also higher than the 7.1 percent growth seen in December 2023. It marked the highest in two years, or since the 13.7 percent expansion in December 2022.
Loans to residents increased by 12.4 percent in December from 11.4 percent in the previous month. Meanwhile, loans to non-residents expanded at a faster pace, posting a 5.7-percent growth, compared to 3.9 percent in November.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the growth in credit activity followed the 75 basis points of cumulative rate cuts implemented by the BSP last year.
Ricafort said that stable inflation could justify further rate cuts in the coming months, which would lower borrowing costs, although with some lag effects.
As of end-2024, loan releases for production activities grew by 10.8 percent to P11.22 trillion, up from 9.8 percent in November. In 2023, the loan to this sector grew by just 5.6 percent.
Specifically, loans to real estate activities got the biggest share at P2.65 trillion, up 9.2 percent from a year ago. It was 20.2 percent of the aggregate.
The wholesale and retail trade, repair of motor vehicles and motorcycles followed at P1.51 trillion and electricity, gas, steam and air-conditioning sector at P1.45 trillion.
Meanwhile, loans to the manufacturing sector stood at P1.37 trillion.
On the other hand, consumer loans increased by 25 percent to P1.59 trillion in end-December for a 12.1-percent share of the total loans disbursed by big banks.
This was mainly driven by the 29.4-percent surge in credit card loans to P934.55 billion from P722.46 billion.
Motor vehicle loans also zoomed by 19.5 percent to P454.37 billion from P380.14 billion, while salary-based general-purpose consumption loans rose 16.5 percent to P157.94 billion from P135.52 billion.
“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability objectives,” the central bank said.
In a separate data, the BSP reported a 7.7-percent increase in domestic liquidity to about P18.8 trillion in end-December, the same pace recorded in end-November.
