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By APD writerMelo M. Acuna
MANILA, Jan 31 (APD) – The Bangko Sentral ng Pilipinas said preliminary data showed that outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with them, grew at a slower rate of 15.6 percent in December from 16,8 percent in November.
In a statement released Thursday afternoon, the BSP said they growth in bank lending inclusive of RRPs decelerated to 14.7 percent in December from 15.4 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRPs increased by 0.3 percent and inclusive of RRPs increased as well by 0.5 percent.
Loans for production activities which comprised 88.8 percent of banks’ aggregate loan portfolio, net of RRP, increased at a slower pace of 15.8 percent from 17.2 percent in the previous month. The growth in production loans was driven primarily by increased lending to financial and insurance activities at 30.6 percent, wholesale and retail trade, repair of motor vehicles and motorcycles at 15.2 percent, real estate activities at 11.1 percent, manufacturing at 13.1 percent, electricity, gas, steam and air conditioning supply at 12.0 percent while construction was at 35.9 percent.
Bank lending to other sectors also increased during the month.
Incidentally, the growth of loans for household consumption was marginally lower in December at 13.5 percent relative to the 13.8 percent growth in November 2018. The deceleration in motor vehicle loans as well as the contraction in salary-based general purpose consumption loans and other types of household loans was tempered by the faster expansion in credit cart loans during the month.
The Bangko Sentral ng Pilipinas statement added they will continue to ensure that the expansion of domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives.
Incidentally, the BSP’s Department of Economic Research (DER) projects January 2019 inflation to settle between 4.3 - 5.1 percent range.
Domestic oil price hikes, due to higher international crude oil prices and the second trance of the excise tax adjustment from the TRAIN Law, is seen to be the primary driver of inflation for the month.
In addition, higher fish and vegetable prices due to colder weather conditions and the annual adjustments in the excise taxes of alcoholic beverages from the Sin Tax Law may result in additional upward price pressures.
According to a separate BSP statement, these may be partly offset by lower rice prices, downward adjustment in electricity rates, and the slight appreciation of the peso.
(ASIA PACIFIC DAILY)
