By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) reported bigger growth in bank lending and money supply in November 2019 compared to the previous year.
Initial data showed big banks’ outstanding loans went up by 10.1 percent year-on-year in November compared to 9.3 percent growth in October while month-on-month seasonally-adjusted it grew by one percent.
Domestic liquidity or M3 rose by 9.8 percent year-on-year in November to ₱12.4 trillion. The BSP said M3 grew faster than the 8.5-percent reported in October. “On a month-on-month seasonally-adjusted basis, M3 increased by 1.7 percent,” it said, adding that demand for credit remained the “principal driver of money supply growth.”
“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 BSP.
Net of reverse repurchase placements or RRP, the commercial banks’ outstanding loans totaled ₱8.95 trillion in November. With RPP, the total stood at ₱9.20 trillion in November.
Data showed that loans for production activities net of RRPs increased by 8.1 percent in November to ₱7.8 trillion compared to 7.5 percent in October. Productivity loans accounted for 87.2 percent total loan portfolio during the period.
Loans to real estate activities went up by 19.3 percent to ₱1.63 trillion while financial and insurance activities, construction, and electricity, gas, steam and air conditioning supply, increased by 15.3 percent, 29.1 percent and 7.6 percent respectively to ₱883.95 billion, ₱347.91 billion and ₱979.53 billion.
Loans to household consumption grew by 26.6 percent in November to ₱818.40 billion with motor vehicle loans leading the sector.
In assessing results of the latest money supply, the BSP said net claims on the central government rose by 13.9 percent in November from 6.6 percent in October, and this was because of sustained increase in borrowings by the National Government.
In November, also part of M3, the BSP said net foreign assets (NFA) were up by 11.5 percent from 9.6 percent. The BSP’s NFA position continue to be “supported by foreign exchange inflows coming mainly from overseas Filipinos’ remittances and business process outsourcing receipts.”
“Similarly, the NFA of banks increased as their foreign assets grew as a result of higher loans and investments in marketable debt securities,” said the BSP.