Bank lending up 9.9%; money supply (M3) at P11.4 T in March

Published May 1, 2019, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

Big banks’ outstanding loans grew by 9.9 percent year-on-year in March, a slower pace of growth than February’s 13.7 percent, the Bangko Sentral ng Pilipinas (BSP) said.

MB file photo.
MB file photo.

With reverse repurchase (RRP) placements with the BSP, bank lending growth also slowed to 9.3 percent compared to 13.9 percent in the previous month.
Total outstanding loans stood at P7.769 trillion net of RRPs.

The BSP said it will “continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth, while remaining consistent with the BSP’s price and financial stability objectives.”

Domestic liquidity or M3 in March was up by 4.2 percent year-on-year to P11.4 trillion, slower than the 7.1 percent growth in February.

“Demand for credit eased but remained the principal driver of money supply growth,” said the BSP. It noted that domestic claims increased by 7.3 percent in March from 11.7 percent in February because of sustained growth in credit to the private sector. The net claims on the central government, in the meantime, contracted by 2.2 percent after expanding by 8.3 percent in the previous month, said the BSP.

The BSP said production activities which accounted for 89.5 percent of total loans rose by 11.4 percent in March compared to 13.6 percent in February.

Lending to financial and insurance activities increased by 32.7 percent; wholesale and retail trade, repair of motor vehicles and motorcycles rose by 11.6 percent; real estate activities was up by 8.7 percent; manufacturing grew by 10.6 percent; and construction was up by 41.7 percent.

The BSP said loans for household consumption was down by 5.8 percent in March compared to a 14.9 percent growth in February. This was due to declines in credit card loans and contraction in motor vehicle loans, salary-based general purpose consumption loans and other types of household loans.