Lending by universal and commercial banks expanded by 10.4% year-on-year in July, picking up pace from 9.8% in June as business borrowing gained momentum, according to the Bangko Sentral ng Pilipinas (BSP).
Outstanding loans extended to residents, which constitute the vast majority of total bank lending, rose by 10.8% year-on-year during the month.
Commercial activities anchored the overall expansion, with loans for business operations accelerating to 9.8% in July. The uptick was driven by increased credit extended to key industries, including energy and utilities, wholesale and retail trade, motor vehicle repair, manufacturing, financial and insurance services, and information and communication.
Meanwhile, consumer credit to residents grew at a slower pace of 17.1% compared to the previous month. The central bank noted that demand for credit cards and auto loans softened amid subdued consumer sentiment.
The BSP closely tracks credit metrics as bank lending serves as a primary transmission mechanism for monetary policy. Looking ahead, the central bank stated it will maintain lending conditions that support its broader mandates of price and financial stability.
