Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 17.9 percent in January 2017 from 17.3 percent (revised) in December 2016. Likewise, bank lending inclusive of RRPs expanded by 16.2 percent from 16.1 percent (revised) 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 1.6 percent, respectively.

Loans for production activities-which comprised about 89.2 percent of banks' aggregate loan portfolio, net of RRP - grew by 17.5 percent in January 2017 from 16.9 percent (revised) in December 2016. The growth in production loans was driven primarily by increased lending to the following sectors: real estate activities (18.7 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (20.6 percent); financial and insurance activities (25.1 percent); electricity, gas, steam and airconditioning supply (15.8 percent); and manufacturing (8.5 percent). Bank lending to other sectors also increased during the month except in the case of public administration and defense, compulsory social security (-8.2 percent); and mining and quarrying (-3.3 percent).

Loans for household consumption also increased by 23.7 percent in January 2017 from 23.4 percent (revised) in December 2016 due to the expansion in credit card loans as well as sustained growth in motor vehicle loans and salary-based general-purpose loans, offsetting the decline in 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: BangkoSentralngPilipinas (BSP)