MANILA, Philippines - Bank lending grew at a faster pace in December compared to the earlier month, signifying growing confidence in the market as the economy recovers, the central bank said Wednesday.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said outstanding loans of the country's commercial banks grew 9.1% to P2.4 trillion in December, against a growth of only 2.6% in November.

Excluding bank replacements with the BSP, banks' loans were up 10% compared to the previous month's 6.6% expansion.

"The pick-up in lending growth during the last two months is indicative of the growing confidence of business and households as financial and economic conditions stabilize," said BSP Officer-in-Charge Nestor Espenilla Jr.

He added that "with credit demand recovering, a private sector-led expansion is gradually gaining ground."

The BSP recorded a 9.9% increase in production loans, owing largely to more borrowings in the transportation, storage and communication, and financial intermediation sectors.

Consumer loans meantime rose 11%, driven by higher demand for auto loans, and increased credit card use.

Going forward, the BSP said it would continue to provide appropriate policy support to ensure credit availability in the system.

The central bank kept its key policy rate at a record low of 4% at its January 28 meeting but raised the rate on one of its short-term lending facility as first step in unwinding easy monetary policies.