Preliminary data shows that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the BSP expanded anew for the sixth consecutive month at a quicker pace of 8.5 percent year-on-year in January from 4.8 percent (revised) in the previous month, the Bangko Sentral ng Pilipinas said Monday.

Bank lending improved further as easing COVID-19 restrictions and the continuous vaccine rollout supported market sentiment and demand. On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, rose by 3 percent.

Outstanding loans to residents, net of RRPs, went up by 8.7 percent in January from 4.8 percent in December, given the faster growth in loans for production activities.

Outstanding loans for production activities increased by 9.6 percent in January from 6 percent (revised) in December due to the expansion in credit activity for real estate activities (16.8 percent); financial and insurance activities (17.1 percent); information and communication (31.4 percent); and manufacturing (11.5 percent).

Similarly, consumer loans to residents increased marginally by 0.1 percent in January after a 5.9-percent decline (revised) in the previous month, driven mainly by the year-on-year rise in credit card loans.

This is the first time household loans posted growth since December 2020. Outstanding loans to non-residents also rose by 2.8 percent in January from 2.5 percent in the previous month.

The BSP continues to prioritize policy support for the economy in order to sustain the recovery in credit activity amid the continued uncertainty in the growth outlook.

Nevertheless, stronger signs of recovery in overall economic activity will allow the BSP to carefully plan for the eventual normalization of its pandemic-related interventions when conditions warrant, in line with its price and financial stability mandates. BSP