Banks' lending to consumers grows at faster pace than business loans

Consumer lending by banks was slightly faster than loan operations last February at 20.3 percent versus 18 percent, the Bangko Sentral ng Pilipinas disclosed Thursday while it also noted a 7.2 percent increase in the country money supply that same month.   The money supply two months ago stood at P4.5 trillion, “supported by steady foreign exchange inflows from overseas remittances, merchandise exports, and portfolio investments,” the BSP said in a statement. "In particular, gross equity capital placements reached US$761 million due to inflows arising mainly from the final tranche of the share purchase agreement for the acquisition of shares of stock by a foreign firm in a local beverage manufacturing company," the BSP said. It referred to the final installment of a $1 billion equity deal between San Miguel Corp. and Kapan's Kirin Holdings. Loans breakdown Loans to businesses amounted to P2.5 trillion or nearly 91 percent of all credit issued while consumer loans totaled P229.49 billion, BSP data showed.   The main chunk of consumer loans—49.57 percent—was credit card debt, which has been above P130 billion since November last year.   According to the BSP, “expansion in production loans was driven primarily by higher lending to wholesale and retail trade, financial intermediation, manufacturing, and electricity, gas and water.”   Agriculture, hunting, and forestry, as a sector, saw its loan availment fall by 45.3 percent.   The BSP has kept its policy rates low to ensure that “steady growth in domestic liquidity…remains ample to fund the economy’s growth requirements” while keeping inflation in check in the 3 to 5 percent target range. — ELR, GMA News