Bank lending growth slows in April
abs-cbnNEWS.com | 06/03/2009 9:29 PM
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MANILA - Lending by banks continued to grow by double digits in April, although slower than in the month before, according to the Bangko Sentral ng Pilipinas (BSP).
In a report, the BSP said lending rose by 13.4 percent in April compared to 18.9 percent in March.
Excluding placements of funds with the BSP, the central bank said lending grew at a faster pace of 19 percent in the fourth month of the year from 17.8 percent in the previous month.
Preliminary data indicated that loans for production activities continued to lead credit expansion, growing at a faster rate of 18.1 percent in April from 16.8 percent in March.
The BSP reported that the growth in consumption loans also accelerated to 13.5 percent from 9 percent, supported by the strong demand for auto loans and the sustained increase in credit card lending.
The BSP said the increase in loans extended to the different production sectors, comprising nearly half of total loans, contributed significantly to overall lending growth. These sectors include agriculture, hunting, and forestry (33.6 percent); real estate, renting and business services (36.8 percent); transportation, storage and communication (68.2 percent); electricity, gas and water (34.6 percent); and other community, social and personal services (37.3 percent).
On the other hand, loans to the manufacturing sector and financial intermediation activities, which accounted for more than a quarter of total loans, contributed marginally to lending growth, at less than 1 percent each.
Bank lending to wholesale and retail trade; public administration and defense; education; construction; and mining and quarrying sectors registered contractions in April.
The slowdown was not a surprise though since the BSP has been expecting banks to start clamping down on risky borrowers, with lending growth possibly slowing down to about 10 percent this year from 20 percent in 2008.
The BSP said bank lending would be affected by the economic recession in developed countries and the slowdown in growth in the rest of the world.
It noted that banks have begun to tighten their credit standards because of the greater tendency of borrowers to default on their loans.
The BSP said the move could limit the effects of monetary policy easing.
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