The country’s big commercial and universal banks extended loans just shy of P11 trillion in July this year, marginally lower than the previous June when these same loans aggregated P10.985 trillion, according to the Bangko Sentral ng Pilipinas (BSP).
The marginal change represented loan growth of only 7.7 percent in July from 7.8 percent the previous June and developed in that period when domestic liquidity expanded at a slower pace averaging 5.7 percent to P16.2 trillion from 5.9 percent in June.
This means the economy and its main economic actors as households and businesses continue to have access to funds that allow the economy to flourish without having to pay pay for it in terms of inflation.
According to the BSP, bank loans net of placements with the central bank aggregated P10.999 trillion in July from only P10.985 the previous June when the monetary authorities endeavored to keep the $404 billion southeast Asian steady by adopting a policy stance that left the interest rate structure unchanged.
The steady hand on interest rates is premised on the BSP view that inflation, which is a tax on household consumption and business operations, should revert to within-target levels around yearend.
Data show outstanding production loans the banks extended to borrowers in the electricity, gas, steam; the wholesale and retail trade; real estate; information and communication; and transport and storage sectors grew by 6.2 percent in July.
Loans to households during the period similarly grew by 22.6 percent and proof positive that growth in the Philippines is consumption driven.
