BANK lending picked up in December while money supply growth stayed steady, the Bangko Sentral ng Pilipinas (BSP) reported late on Tuesday.
The outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 12.2 percent from 11.1 percent in November.
It was the fastest growth seen since December 2022’s 13.7 percent.
Domestic liquidity (M3), meanwhile, grew by 7.7 percent — unchanged from the previous month — to P18.8 trillion.
Month-on-month and seasonally adjusted, bank lending expanded by 1.4 percent while liquidity growth was 0.2 percent higher.
Outstanding loans to residents net of RRPs grew by 12.4 percent in December from 11.4 percent a month earlier, while those granted to nonresidents rose to 5.7 percent from 3.9 percent.
Loans for production activities grew by 10.8 percent from 9.8 percent in November.
This was largely due to sustained growth in loans for wholesale and retail trade, repair of motor vehicles and motorcycles (10.1 percent); electricity, gas, steam and air-conditioning supply (14.2 percent); manufacturing (7.4 percent); financial and insurance activities (7.4 percent); and construction (12.6 percent).
Consumer loans to residents, meanwhile, saw growth increase to 25.0 percent from 23.0 percent and were said to have been driven by an increase in credit card loans; salary-based general purpose consumption loans, and motor vehicle loans.
As for liquidity, domestic claims eased to 10.4 percent in December from 10.8 percent in the prior month.
Claims on the private sector expanded by 12.2 percent from November’s 11.7 percent and the growth was attributed to a continued expansion in bank lending to non-financial private corporations and households
Net claims on the central government, meanwhile, saw growth slow to 7.2 percent from 9.2 percent due to higher state borrowings.
In peso terms, net foreign assets (NFA) expanded by 6.0 percent in December, down from 9.8 percent in November.
The central bank’s NFA position grew by 6.8 percent, while that of banks was said to have declined owing to “higher bills and bonds payable.”
The BSP said it would continue to ensure that “domestic liquidity conditions remain consistent with the prevailing stance of monetary policy, in line with its price and financial stability objectives.”
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the continued growth in bank lending was due to the easing of the policy rate and an improving inflation outlook.
“The pickup in bank loan growth in recent months could also be attributed to improved business and economic conditions, especially in terms of improved data on employment in recent months,” he added.
“For the coming months, an easing trend in headline inflation [that] would eventually justify more local policy rate cuts later … would help spur greater demand for loans due to lower borrowing costs.”
