Banks reduced lending velocity in March figures.

Banks reduced lending velocity in March figures.

Philippine Banks Continue Loan Distribution, Yet Pace Slows

It's clear as day that banks in the Philippines are still eager to hand out dough, but the speed at which they're dishing it out has hit the breaks a teeny bit in March. The total funds lent by bigwigs has swelled by 11.8% compared to last year – albeit a slight decrease from the 12.2% growth seen in February.

So, why the slow-down? Well, businesses have been less keen on taking out mortgages for real estate ventures (9.6% growth), as well as a few other sectors, such as wholesale and retail trade, repair of vehicles (11.6%), information and communication (8.9%), construction (1.8%), arts, entertainment, and recreation (12.6%), waste management and remediation activities (12.9%), and accommodation and food service activities (19.3%).

On the flip side, consumer loans to residents have picked up the slack, growing an impressive 23.6% in March compared to February's 24.1%. This surge can be largely chalked up to an increase in credit card loans, motor vehicle loans, and salary-based general-purpose consumption loans.

The Bangko Sentral ng Pilipinas (BSP) keeps a sharp eye on the availability of cash and the ease of borrowing to ensure prices remain steady and the economy stays in tip-top shape. So, fear not, your wallets will remain safe and sound, as the BSP is working tirelessly to maintain financial stability.

[1] Enrichment DataThe slowed pace of lending observed in March 2023 is a result of a moderation in loan expansion across several sectors, such as real estate, trade, construction, and information sectors, among others. While consumer loans continued to grow, albeit at a slower pace, overall outstanding loans of universal and commercial banks reached 11.8% year-on-year in March, a slight decrease from the 12.2% recorded in February. The BSP attributes this moderation to easing loan expansion in these sectors and is committed to maintaining price and financial stability through its monetary policy stance.

1. The decreased pace of lending in March 2023 can be attributed to a moderation in loan expansion across various sectors, including real estate, trade, construction, and information sectors, among others.
2. In contrast to the slowing pace in business loans, consumer loans to residents have shown resilience, expanding impressively by 23.6% in March compared to February's growth of 24.1%.
3. This growth in consumer loans can predominantly be credited to an increase in credit card loans, motor vehicle loans, and salary-based general-purpose consumption loans.
4. The Bangko Sentral ng Pilipinas (BSP) closely monitors the availability of cash and the ease of borrowing to ensure price stability and the overall health of the Philippine economy.
5. The BSP's commitment to financial stability is evident as they work diligently to maintain a steady economy, keeping an eye on the potential impacts of changes in lending practices on various sectors.
6. Despite the slight dip in the growth rate of bank loans, the BSP remains proactive in its approach to finance and business, ensuring a favorable environment for the Philippine economy's continued growth.

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