Preliminary data show that outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slower rate of 9.9 percent in March from 13.7 percent in February. Likewise, the growth in bank lending inclusive of RRPs decelerated to 9.3 percent in March from 13.9 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRPs and inclusive of RRPs decreased by 1.6 percent and 2.0 percent, respectively.

Loans for production activities�which comprised 89.5 percent of banks' aggregate loan portfolio, net of RRP � increased at a slower pace of 11.4 percent in March from 13.6 percent in the previous month. The growth in production loans was driven primarily by increased lending to the following sectors: financial and insurance activities (32.7 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (11.6 percent); real estate activities (8.7 percent); manufacturing (10.6 percent); construction (41.7 percent); and, electricity, gas, steam and airconditioning supply (9.4 percent). Bank lending to other sectors also increased during the month except those in other community, social and personal activities (-59.7 percent); professional, scientific and technical activities (-19.0 percent); mining and quarrying (-3.3 percent); and, human health and social work activities (-0.2 percent).

Meanwhile, loans for household consumption declined by 5.8 percent in March from a growth of 14.9-percent in February amid the deceleration in credit card loans and contraction in motor vehicle loans, salary-based general purpose consumption loans and other types of household loans during the month.

Going forward, the BSP will continue to ensure that the expansion in domestic credit and liquidity 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)