By : Lawrence Agcaoili, The Philippine Star
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported over the weekend that bank lending posted a double-digit growth for the second straight month in February on the back of rising demand for funds amid the country’s increased domestic economic activities.
BSP officer-in-charge Juan de Zuniga said in a statement that bank lending growth accelerated to 12.3 percent in February from 11 percent in January as corporate and individual borrowers continued to source funds from banks to finance their business expansions.
“The sustained expansion in bank lending supports the view that the underlying domestic demand momentum remains strong,” de Zuniga stressed.
He added that authorities would ensure appropriate monetary and financial conditions for continued credit expansion while promoting the BSP’s primary mandate of maintaining price stability.
Data showed that banks loans stood at P2.34 trillion as of February or P257 billion higher than the P2.084 trillion recorded in February last year due to the strong growths in loans to productive activities as well as for household consumption.
Loans extended to productive activities jumped by 13.4 percent to P2.12 trillion as of end-February from P1.862 trillion in the same month last year as corporate borrowers sourced more loans from banks to bankroll their expansion programs.
The loan growth to the manufacturing sector grew 21.2 percent to P385.4 billion followed by the real estate, renting, and business services that grew by 16.9 percent to P368.9 billion; agriculture, hunting, and fishery sector with 5.5 percent to P337.7 billion.; the wholesale and retail trade that expanded by 18 percent to P263.9 billion; and electricity, gas, and water with 36.1 percent to P200.6 billion.
The BSP also reported that loans extended for household consumption posted a double digit growth of 10 percent to P190.81 billion in February from P173.5 billion in the same month last year. Credit card loans inched up by 4.4 percent to P115.95 billion from P111.1 billion while auto loans jumped 26.4 percent to P59.4 billion from P47 billion.
A BSP survey showed that more and more companies are planning to expand their operations and hire more workers in the Philippines this year after the country posted its strongest economic growth in 34 years last year.
BSP director for Department of Economic Statistics Rosabel Guerrero earlier said about one third of the respondents of the Business Expectations Survey (BES) for the first quarter 2011 indicated plans to expand their operations starting the second quarter of the year.
“Consistent with the more positive outlook of the industry sector about their own operations, more firms or 33.9 percent of the respondents indicated expansion plans for the second quarter this year,” Guerrero stressed.
This was higher than the previous quarter’s survey wherein only 25.7 percent of the total respondents signified their intention to increase their presence in the Philippines .
Expansion plans were noted across all sub-sectors wherein mining and quarrying continued to record the highest expansion plans with 47.3 percent followed by agriculture, fishery, and forestry with 45.3 percent; electricity, gas, and water with 38.5 percent; and the manufacturing sub-sectors with 32.5 percent.
The Philippines posted its strongest growth since 1976 after its gross domestic product (GDP) grew by 7.3 percent last year. It was on the verge of a recession in 2009 when its GDP growth slackened to 1.1 percent from 3.8 percent in 2008 due to the full impact of the global financial crisis.