Credit growth picked up slightly in March after slowing down for three straight months as the aggressive rate hikes delivered by the Bangko Sentral ng Pilipinas (BSP) eat into bank lending.

Preliminary data released by the central bank showed that loans disbursed by universal and commercial banks grew by 10.1 percent in March from 10 percent in February.

Loans released by big banks amounted to P10.76 trillion in end-March, P984 billion higher than the P9.78 trillion disbursed in the same month last year.

'The sustained growth in credit is supported by sound Philippine banking system conditions,' the BSP said in a statement.

For March, loans to production activities increased at a slightly faster rate of 8.9 percent to P9.4 trillion from P8.63 trillion in the same month last year and accounted for 87.3 percent of the total disbursements.

Disbursements to the real estate sector accelerated by 4.2 percent to P2.18 trillion, followed by the wholesale and retail trade, repair of motor vehicles and motorcycles, with a faster increase of 10.5 percent to P1.25 trillion.

Both manufacturing, as well as electricity, gas, steam and air-conditioning supply sectors, registered higher growth in loan disbursements with P1.17 trillion each for an identical share of 10.9 percent.

The financial and insurance sectors also registered a 13.1-percent increase to P1.02 trillion and accounted for 9.5 percent of the total loan disbursements.

The BSP also reported that the jump in consumer loans was sustained at 21.3 percent to P1.05 trillion in March for a share of 9.3 percent amid the series of aggressive rate hikes by monetary authorities to fight inflation and stabilize the peso.

The rise in credit card loans slowed at 27.9 percent to P570.36 billion in March from P446.07 billion in the same month last year after the BSP raised the cap on interest rate charges to three percent per month from two percent.

Auto loans inched up by 0.5 percent to P334.41 billion from P332.59 billion, while salary-based general-purpose consumption loans jumped by 67 percent to P123.82 billion and other loans surged by 63 percent to P23.73 billion.

'Looking ahead, the BSP will continue to monitor domestic liquidity dynamics to ensure that credit conditions remain in line with its price and financial stability mandates,' the central bank said.

It also reported a six-percent increase in money supply or M3 to P16.18 trillion in March from P15.27 trillion in thae same month last year.


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