Preliminary data show that outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 20.4 percent in August from 19.7 percent in July. Similarly, bank lending inclusive of RRPs increased by 17.9 percent in August from 18.7 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending for loans net of RRPs and loans inclusive of RRPs increased by 1.8 percent and 0.8 percent, respectively.

Loans for production activities�which comprised 88.5 percent of banks' aggregate loan portfolio, net of RRP � grew by 19.5 percent in August from 18.9 percent in July. The growth in production loans was driven primarily by increased lending to the following sectors: real estate activities (18.0 percent); electricity, gas, steam and airconditioning supply (23.7 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (15.2 percent); manufacturing (13.1 percent); information and communication (38.1 percent); other community, social and personal activities (127.7 percent); agriculture, forestry and fishing (36.7 percent); and, financial and insurance activities (12.5 percent). Bank lending to other sectors also increased during the month except in administrative and support services activities, which declined by 24.5 percent.

Loans for household consumption increased by 22.8 percent in August from 22.3 percent in July due to the expansion in auto loans and credit card loans as well as sustained growth in salary-based general purpose loans and other types of household 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)