Bank loans rose 5 percent in January from a year ago, slower than the 10-percent increase recorded in December, as demand for loans by companies for production activities decelerated.
The outstanding loans of commercial banks, including banks’ reverse repurchase placements with the central bank, also grew at a slower pace of 6.9 percent to P2.2 trillion in January compared with a 9.1-percent increase in December.
“On a month-on-month seasonally-adjusted basis, commercial banks’ lending in January declined by 2.1 percent for loans inclusive of placements with Bangko Sentral, and by 1.1 percent for loans net of reverse repurchase placements,” the central bank said.
“The deceleration of bank lending growth could be traced to the slowdown in the growth of loans for production activities at 4.4 percent in January from 9.9 percent a month ago.”
Analysts linked the sluggish demand for bank loans by Philippine companies to their renewed appetite for bonds. Large Philippine companies in 2009 issued P411.8 billion worth of bonds, up 250 percent from P117.4 billion in 2008.
Bangko Sentral noted the slower growth in production loans extended to financial intermediation, and transportation, storage and communication. The decline in the outstanding loans to electricity, gas and water also contributed to the overall slowdown of lending growth, it said.
Manufacturing loans, accounting for about 14.0 percent of total credits, contracted at a slower rate of 15.5 percent in January compared with a decline of 16.5 percent in December.
The contraction in construction loans also decelerated to 3.7 percent from a decline of 27.4 percent in December.
Loans to real estate, renting and business services rose 12.9 percent; agriculture, hunting and forestry, 9.3 percent; wholesale and retail trade, 6.3 percent; financial intermediation, 6.8 percent; public administration and defense, 16.5 percent; hotels and restaurants, 41.4 percent; mining and quarrying, 56.3 percent; health and social work, 34.2 percent; and education, 3.6 percent.
The Bankers Association of the Philippines and the Chamber of Thrift Banks said they expected loans to pick up in the second half, if the May 2010 election turned out to be peaceful and credible.
Consumption loans, however, rose at a faster rate of 12.5 percent in January from 11 percent in December, following the stronger growth in auto loans and credit card lending.
Bangko Sentral Deputy Gov. Diwa Guinigundo said the continued expansion in overall lending stemming from faster growth in consumer loans along with the slower contraction in manufacturing and construction loans confirmed the improvement in real sector activity.
