Bank loans grew over 10% for 2nd straight month in June despite high interest rates

Bank loans in the Philippine financial system grew over a tenth for the second consecutive month, recording a 10.1% year-on-year growth in June, matching the previous month’s rate, according to the latest data from the central bank.

This rise comes despite the prevailing high interest rates, underscoring robust economic activity.

Excluding their short term placements with the Bangko Sentral ng Pilipinas (BSP), the universal and commercial banks now have a combined P12.1 trillion trillion worth of loans to wholesale and retail borrowers, as of the most recent count.

Notably, consumer loans to residents increased by 25%, driven by a rise in credit card loans.

Additionally, loans to key industries, such as real estate, wholesale and retail trade, manufacturing, transportation, and utilities, contributed to the steady growth.

Amid the prevailing high interest rates — which the central bank has indicated will ease in the coming weeks — BSP Governor Eli Remolona Jr. said in his statement that the agency remains committed to ensuring that credit activity aligns with its objectives of price and financial stability, despite the challenging high-interest environment.