By Lee C. Chipongian
Big banks’ outstanding loans expanded at a slower pace in October at 9.3 percent year-on-year compared to 10.5 percent in September, the Bangko Sentral ng Pilipinas (BSP) reported Friday.
In a statement, the BSP said that despite the growth in credit across sectors, bank lending net of reverse repurchase (RRP) placements with the BSP, was slower in October. On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRPs was only up by 0.3 percent.
Net of RRPs, bank lending amounted to ₱8.796 trillion in October. Gross of RRPs, loans totaled ₱9.031 trillion.
The domestic liquidity or M3 grew by 8.5 percent year-on-year in October to ₱12.1 trillion. It was a faster growth compared to 7.7 percent in September for an M3 increase of 0.9 percent month-on-month.
The BSP said demand for credit continue to be the “principal driver of money supply growth” with domestic claims rising by 6.7 percent in October from 7.5 percent in September “due mainly to the sustained growth in credit to the private sector.”
“The BSP will continue to monitor domestic liquidity dynamics to ensure that overall monetary conditions remain in line with maintaining the BSP’s price and financial stability objectives,” said the central bank.
As for bank lending, the loans for production activities – about 87.2 percent of banks loan portfolio – increased by 7.5 percent in October, also lower than September’s nine percent. Total loans amounted to ₱7.672 trillion.
The BSP said the sustained increase in production loans was driven primarily by lending to the following sectors: real estate activities (18.4 percent);
financial and insurance activities (11.6 percent); construction (28.9 percent); electricity, gas, steam and air conditioning supply (5.2 percent); and wholesale and retail trade, repair of motor vehicles and motorcycle (three percent).
In the meantime, loans for household consumption went up by 26.7 percent to ₱805.934 billion in October from 26.2 percent in September. The expansion in motor vehicle, credit card, and salary-based general purpose consumption loans fueled this portfolio growth.