ASEAN KEY DESTINATIONS
Philippine bank lending in May rises to ten-year high
Philippine’s outstanding loans in May jumped 15.4 percent from a year earlier, the highest since 1998 when loan demand fell after the Asian financial crisis, said Reuters on Thursday.
The country’s central bank data showed on Thursday that bank lending grew by 7.7 percent in April and a revised 10.3 percent in March, based on data from a new reporting system adopted by the central bank, which uses a wider coverage of economic sectors.
The new system classifies lending based on 16 production sectors and three household consumption purposes compared with the old system which classified loans into only nine economic sectors, the central bank said in a statement.
Excluding banks’ overnight placements with the central bank, outstanding loans expanded 15.8 percent in May from a year earlier, higher than April’s 14.6 percent and against a revised 16.1 percent in March.
From February to May this year, the central bank kept its key overnight borrowing rate steady at 5 percent, the lowest since May 1992.
In June, the central bank turned hawkish, raising its policy rates by 25 basis points and a further 50 basis points in July, a move that could impact on loan demand.
Debts of the production sector accounted for three-fourths of total outstanding bank loans, with production-related loans rising 13.6 percent in May from a year ago, 12.9 percent in April and 14.4 percent in March, the central bank data showed.
Consumer-related loans, which made up about 8 percent of total bank lending, climbed 21.6 percent in May compared with 15 percent in April and 19.4 percent in March.
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