Banks post fastest loan growth in 25 months

Banks post fastest loan growth in 25 months

By Lawrence Agcaoili (The Philippine Star) Updated July 12, 2011 12:00 AM Comments (1) 

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported yesterday that banks operating in the Philippines posted the fastest loan growth in 25 months after expanding 18.8 percent in May due to increased domestic economic activities.

BSP Governor Amando Tetangco Jr. said in a statement that bank loans reached P2.544 trillion as of end-May, or P403 billion higher than the P2.141 trillion as of end-May last year.

“The steady pace of domestic economic activity and stable financial conditions supported the credit expansion in May,” Tetangco stressed.

Tetangco pointed out that loans have been growing steadily at double-digit rates of 11 percent in January, 12.3 percent in February, 14.1 percent in March, 14.2 percent in April and 18.8 percent in May.

He added that the increase last May was the highest rate recorded since April 2009.

Economic managers, through the Cabinet-level Development Budget Coordination Committee (DBCC), see the country’s domestic output, as measured by the gross domestic product (GDP), growing between seven percent to eight percent this year and next year.

The Philippines posted its strongest growth in 34 years as GDP posted a surprising growth of 7.6 percent last year after slackening to 1.1 percent in 2009 from 3.8 percent in 2008 due to the full impact of the global financial crisis.

As expected, the country’s GDP growth slowed down to 4.9 percent in the first quarter of the year from the revised 8.4 percent in the same quarter last year due to government underspending as well as the weak global trade.


 
Despite the economic slowdown, loans extended to production activities grew 20.5 percent to P2.314 trillion as of end-May from P1.92 trillion in the same period last year as corporate borrowers sourced more loans from banks to bankroll their expansion programs.

In terms of growth, data showed that loans to the mining and quarrying sector posted the biggest growth of 223.5 percent, followed by electricity, gas and water with 52.7 percent.; real estate, renting, and business services with 21.3 percent.; financial intermediation with 20.4 percent; and the manufacturing sector with 20.2 percent.

In terms of amount, the manufacturing sector got the biggest share with P426.97 billion followed by the real estate, lending and business services with P397.25 billion; the agriculture, hunting, and fisheries sector with P349.38 billion; wholesale and retail trade sector with P272.96 billion; and the electricity, gas, and water sector with P239.33 billion.

Data showed that the growth in the loans extended for household consumption was a steady 14.9 percent to P201.69 billion in end-May from P175.53 billion in the same month last year.

The BSP chief pointed out that authorities would ensure appropriate monetary and financial conditions for continued credit expansion while promoting the BSP’s primary mandate of maintaining price stability.

“Going forward, the BSP will contiue to watch evolving credit and liquidity conditions closely to en sure that bank lending growth continues to reflect the pace of domestic demand while at the same time maintaining overall price an d financial stability,” Tetangco added.

--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
------------------------------------------