Loan growth further accelerated for the third straight month in February, growing by 8.6 percent from 7.8 percent in January, according to the Bangko Sentral ng Pilipinas (BSP).

Data released by the central bank showed the outstanding loans of universal and commercial banks amounted to P11.6 trillion as of end-February, P921 billion higher than the P10.7 trillion disbursed in the same period in 2023.

The February growth rate marked the highest since the 9.4 percent expansion recorded in May last year.

Despite the improvement, Rizal Commercial Banking Corp. chief economist Michael Ricafort said bank loans are still weighed by the higher interest rate environment that made borrowing more expensive.

'The pickup in bank loans growth in recent months could be attributed to improved business and economic conditions, especially in terms of improved data on employment, inflation and Philippine growth, as the economy recovers further from the effects of the COVID-19 pandemic,' he said.

The Philippine economy expanded by 5.5 percent in 2023, slower than the 7.6 percent growth in 2022. Even if the country missed its growth target of six to seven percent last year, the Philippines was one of the fastest-growing economies in the region.

Amid the aggressive interest rate hikes by the BSP's Monetary Board, credit growth in the Philippines remained steady and robust as businesses and consumers continue to borrow money to cope with elevated prices.

BSP data showed outstanding loans for production activities grew at a faster rate of 6.8 percent to P9.97 trillion in February, from 5.9 percent in January, and accounted for 85.9 percent of the total lending.

The real estate sector posted a strong double-digit increase of 11.6 percent to P2.38 trillion and accounted for 20.5 percent of the total disbursements. Lending to the electricity, gas, steam and airconditioning supply likewise grew at a faster rate of 11.2 percent to P1.28 trillion for a share of 11 percent.

Credit to industries in wholesale and retail trade as well as repair of motor vehicles and motorcycles also expanded by 7.1 percent to P1.31 trillion for an 11.2-percent share.

Lending to the manufacturing sector booked a 5.9-percent increase to P1.24 trillion for a share of 10.7 percent.

Consumer loans also jumped by 25.2 percent to P1.31 trillion as of end-February, or about 11.2 percent of the total loans disbursed by big banks, steady from the same rate of expansion in the previous month.

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