The Bangko Sentral ng Pilipinas (BSP) said bank lending went up by 10 percent last year net of reverse repurchase (RRP) placements to P2.146 trillion and 9.1 percent with RRPs to P2.378 trillion.

BSP Governor-in-Charge Nestor A. Espenilla Jr. said: "The pick-up in lending growth during the last two months is indicative of the growing confidence of business and households as financial and economic conditions stabilize."

Espenilla also said that with credit demand recovering, a "private sector-led expansion is gradually gaining ground. Going forward, the BSP will continue to provide appropriate policy support to ensure credit availability in the system."

In an interview last January, Espenilla said bank lending will be brisker this year as more banks increase loans to the middle economy where growth is higher during an election year.

The BSP earlier thought bank lending will only grow five percent for 2009 but banks were fairly active in its lending activities last year, reporting higher profits than expected due in part to trading income.

On a month-on-month seasonally-adjusted basis, BSP said commercial banks lending in December rose by 6.1 percent for loans inclusive of RRPs, and by 4.3 percent with RRPs.

In a statement, BSP said preliminary data showed that both production and consumption loans increased from the previous month’s level, accelerating at 9.9 percent and 11.0 percent from the previous month’s growth of 6.7 percent and 3.8 percent, respectively.

Production loans contributed 8 percentage points to bank lending growth, with the following sectors contributing to the growth in bank lending: transportation, storage and communication (which grew by 85.2 percent); financial intermediation (45.5 percent); real estate, renting and business services (12.3 percent); electricity, gas and water (28.1 percent); agriculture, hunting, and forestry (7.9 percent); public administration and defense (25.8 percent); wholesale and retail trade (4.6 percent); hotels and restaurants (34.1 percent); and health and social work (25.9 percent).