Bank lending up 10.9% in December 2019; M3 at P13T

Published February 5, 2020, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

Big banks’ outstanding loans went up by 10.9 percent year-on-year in December 2019, a faster growth than November’s 10.1 percent, the Bangko Sentral ng Pilipinas (BSP) said.

On a month-on-month seasonally-adjusted basis, commercial bank loans net of reverse repurchase placements (RRPs) with the BSP increased by 1.3 percent, the BSP added.

In peso terms, bank lending amounted to P9.24 trillion net of RRPs. Gross of RRPs, it is P9.51 trillion.

As for domestic liquidity or M3, this grew by 11.4 percent year-on- year P13 trillion in December 2019 compared to 9.8-percent in November. Month-on-month seasonally-adjusted basis, M3 was up by 1.6 percent.

“Demand for credit remained the principal driver of money supply growth,” said the BSP. Domestic claims increased by 10.5 percent because of “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

About 87.4 percent of released loans in December are for production activities. This was up 9.1 percent year-on-year compared to 8.1 percent in November. Some P8.07 trillion were loans for production or economic activity.

The BSP said that the “sustained increase in production loans was driven primarily by lending to the following sectors: real estate activities (19.7 percent); financial and insurance activities (17.2 percent); electricity, gas, steam and air conditioning supply (8.3 percent); construction (23.4 percent); and information and communication (12.9 percent).”

In the meantime, big banks’ household consumption loans rose by 27.5 percent in December from 26.6 percent in November and this was because of “faster growth in credit card and salary-based consumption loans during the month.” These loans reached P839.25 billion in December.

The BSP said it will “continue to ensure that the expansion in domestic credit and liquidity” will remain non-inflationary.