Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, expanded at a slower rate of 19.9 percent in October from 21.1 percent in September. Similarly, the growth in bank lending inclusive of RRPs slowed down to 18.0 percent in October from 20.1 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending for loans net of RRPs increased by 0.8 percent, while loans inclusive of RRPs declined by 0.4 percent.

Loans for production activities�which comprised 88.3 percent of banks' aggregate loan portfolio, net of RRP � grew albeit at a slower rate of 18.7 percent in October from 20.7 percent in September. The growth in production loans was driven primarily by increased lending to the following sectors: electricity, gas, steam and airconditioning supply (25.0 percent); real estate activities (16.0 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (19.9 percent); financial and insurance activities (24.5 percent); information and communication (40.4 percent); and, manufacturing (9.4 percent). Bank lending to other sectors also increased during the month except in public administration, defense and compulsory social security (-1.1 percent), and administrative and support services activities (-22.2 percent).

Growth in loans for household consumption accelerated to 23.4 percent in October from 20.0 percent in September. The expansion in credit card loans, motor vehicle loans and other types of household loans compensated the slower growth in salary-based general purpose loans.

Going forward, the BSP will continue to ensure that the expansion in domestic credit and liquidity conditions proceeds in line with overall economic growth while remaining consistent with the BSP's price and financial stability objectives.

Source: Bangko Sentral ng Pilipinas (BSP)