BANK lending continued to rise in August but money supply growth slowed, Bangko Sentral ng Pilipinas (BSP) data issued on late Friday showed.
The outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 10.7 percent in August, slightly higher than the 10.4 percent recorded in the previous month.
Month-on-month and seasonally adjusted, the expansion was 0.8 percent.
Outstanding loans to residents net of RRPs grew by 10.9 percent from 10.4 percent, while those granted to nonresidents grew at a substantially slower 1.5 percent from 9.2 percent a month earlier.
Loans for production activities, meanwhile, accelerated to 9.4 percent from 8.8 percent.
These mostly comprised lending for real estate activities (13.2 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (10.7 percent); manufacturing (9.8 percent); transportation and storage (23.4 percent); and electricity, gas, steam and airconditioning supply (7.0 percent).
Consumer loans to residents, meanwhile, saw growth ease to 23.7 percent from 24.3 percent and was driven by credit card lending.
As for money supply, domestic liquidity (M3) growth moderated to 5.5 percent to about P17.4 trillion from July’s revised 7.3 percent.
Month-on-month seasonally-adjusted, it contracted by about 0.1 percent.
Domestic claims grew by a slower 10.0 percent from 11.4 percent.
Private sector claims eased to 11.9 percent from July’s 12.0 percent and were said to have been driven by sustained growth in bank lending to businesses and households.
Net claims on the central government also slowed, to 8.5 percent from 14.1 percent, as borrowings continued.
In peso terms, net foreign assets (NFA) expanded by a slower 2.4 percent from 11.2 percent in July.
The central bank’s NFA position grew byt 7.7 percent while that of banks was said to have contracted “on account of higher bills and bonds payable.”
The central bank said it would continue to ensure that domestic liquidity and lending conditions “are consistent with the prevailing stance of monetary policy, in line with its price and financial stability objectives.”
Asked to comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that money supply growth could still pick up in the coming months following a mid-August cut in the BSP’s benchmark rate, and lower bank reserve requirements set to take effect on October 25.
