, Philippines

Chart of the Week: Philippine banks' loan growth to slow to 11% in 2019

Lending growth fell to an eight-year low in May.

Philippine banks can expect a subdued expansion of their loan books as year-end loan growth is expected to slow to 11.0% from 15.7% in 2018, according to Maybank Kim Eng. 

In May, industry-wide loan growth fell to an eight-year low of 11.9%, which implies a growth of only 1.3% YTD. 

Borrowings slowed down in major sectors like wholesale/retail trade at 9.3% in the first five months of the year whilst financial and insurance activities posted a one-year low of 21.2%. On the other hand, manufacturing, utilities and real estate activities have started to show a slight pick-up in demand for two consecutive months, albeit low at less than 2% growth MoM. 

Also readBad loans threaten Philippine banks amidst steep interest rates

"With high cost of funds, banks tend to be more selective with their lending activities so as to protect their interest margin," analyst Katherine Tan said in a report. 

However, a recovery may be in the works especially after the resolution of the national budget impasse may spur borowing for large-scale infrastructure projects. "Additional catalysts could come from approval of unsolicited infrastructure projects of the top infra conglomerates (i.e. San Miguel, MPI); increase in mortgage loan demand as rates ease; and a recovery in auto loan market (sales volume improved 8.7% YoY in Jun)," she added. 

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

SMBC, Fujitsu Limited to create data analytics business
Japanese companies reportedly want data-driven operations to improve efficiency.
India’s credit card spend slumps 9% MoM to 7-month low
Whilst spending grew 12% YoY, the pace of growth has slowed compared to previous months.
CommBank establishes tech hub in Seattle
The first cohort focuses on learning to fast track adoption of agentic AI and gen AI solutions.

Exclusives

Philippine central bank eyes AI rules for banks
Artificial intelligence should not diminish banks’ responsibility to uphold data privacy.
RCBC boosts rural presence with ATM Go
The service, which allows cardless transfers, is now available in all Philippine cities.
BCA superapp drives digital transaction growth
Inter-account transfers were the most widely used service, followed by virtual payments.