Philippine banks record 21.1% increase in May lending

Various industry sectors reflected robust loan growth.

The credit extended by universal and commercial banks in the Philippines net of reverse repurchase placements increased 21.1 percent YoY to PHP3.95t in May, which was observed to be slightly faster than the 20.8 percent rise recorded in April.

According to a research note from Maybank Kim Eng, loan growth has been around the 20 percent level since March, and loans for production activities climbed 19.1 percent, which is slightly higher than the 18.9 percent expansion last month.

Real estate and business services formed 18 percent of the borrowings and climbed 18 percent YoY, while manufacturing (16 percent of production loans) grew strongly by 15.8 percent.

Here’s more from Maybank Kim Eng

Other industry sectors also reflected robust loan growth: construction (41.7%), electricity, gas, and water (36.5%), trade (23.1%), and financial intermediation (20.2%).

Transport, storage and communications remained muted with just 1.8% rise. On the other hand, consumer lending went up 11.2% from 10.7% a month ago. Auto loans accelerated to 13.4% from 11.9%, while credit card receivables grew 5.7% from 5.4%.

Others, which include personal and salary loans, leaped 34%, the third time it hit the 30% level this year. The central bank sees the continued diverse growth in bank lending implies strong growth prospects for the domestic economy.