BANK lending continued to grow but at a slightly slower pace in August this year while domestic liquidity growth accelerated, the Bangko Sentral ng Pilipinas (BSP) said.
Preliminary data released on Thursday, October 2, showed that outstanding loans from universal and commercial banks (U/KBs) to businesses and individual consumers expanded at a slower rate of 11.2 percent in August from 11.8 percent in July.
Outstanding loans issued by U/KBs during the month amounted to P13.61 trillion.
Outstanding loans to residents grew by 11.6 percent in August from 12.4 percent in July, while loans to non-residents recorded a slower decline of 5.9 percent from an 8.1 percent decrease in the previous month.
Loans meant to fund business activities also slowed to 9.9 percent in August from 10.8 percent in July.
Lending increased key industries such as real estate activities; electricity, gas, steam, and air-conditioning supply; wholesale and retail trade, repair of motor vehicles and motorcycles; financial and insurance activities; and information and communication.
Consumer loans to residents — which include credit card, motor vehicle, and general-purpose salary loans — increased by 23.9 percent from 23.6 percent in July.
Domestic liquidity, meanwhile, also known as M3, or the amount of money in the economy, grew by 6.6 percent year-on-year to about P18.6 trillion in August.
Growth of M3 in August was faster than the 6.2-percent increase in July.
M3 is a broad measure of money supply that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash.
As a driver of money supply, claims on the domestic sector, which includes private and government entities in the country, rose by 9.8 percent in August from 10.5 percent in July.
Claims on a sector represent that sector’s liabilities to depository corporations, which include banks and the central bank.
Claims on the private sector grew by 11.1 percent driven by the continued expansion in bank lending to non-financial private corporations and households.
Net claims on the central government increased by 6.1 percent driven by its higher borrowings.
Net foreign assets (NFA) in peso terms rose by 4.8 percent year-on-year in August from the 0.6-percent decline in July.
NFA represents the difference between claims on nonresidents and liabilities to nonresidents of depository corporations.
The BSP’s NFA increased by 0.7 percent while banks’ NFA also grew amid a decline in their foreign currency-denominated bills payable.
“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability mandates,” the BSP said. (PNA)
