Philippines: Bank lending grows at slower pace in Oct 17

• Credit growth eased in Oct 17 after rising for four straight months, prompting debt watchers and economists to flag possible overheating of the Philippine economy.
• Data released by the Bangko Sentral ng Pilipinas (BSP) showed bank lending rose 19.9% in Oct 17, slower than the 21.1% growth recorded in Sep 17.
• Credit growth has been picking up pace, rising 18.7% in May 17, 19% in Jun 17, 19.7% in Jul 17, 20.4% in Aug 17.
• “Going forward, the BSP will continue to ensure that the expansion in domestic credit and liquidity conditions proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” BSP Governor Nestor Espenilla Jr. said in a statement.
• Debt watchers Fitch Ratings and Moody’s Investors Service, and multilateral lender International Monetary Fund have flagged overheating risks.
• Espenilla earlier said the Philippine economy continued to grow within potential while the non-performing loan ratio of Philippine banks stood at a mere 1.4%.
• He added the country’s credit-to-GDP ratio of 63.6% as of 2Q17 was still one of the lowest by far in Asia, indicating relatively low overall leverage.
• The BSP also reported that domestic liquidity or money supply grew at a faster rate of 14.8% to PHP10.3tr as of the end of Oct 17 but this remained consistent with the central bank’s prevailing outlook for inflation and economic activity.

External Link : http://www.philstar.com/business/2017/12/06/1765588/bank-lending-grows-slower-pace-october