Bank lending up 12%, money supply at P15.4 T -- BSP
Big banks’ outstanding loans grew by 12 percent year-on-year in July, the same growth posted in June, based on Bangko Sentral ng Pilipinas (BSP) data.
Net of reverse repurchase (RRP) placements with the BSP, bank lending on a month-on-month seasonally-adjusted basis rose by 0.6 percent.
“The sustained growth in bank lending and liquidity will support the recovery of economic activity and domestic demand,” said the BSP on Wednesday, Aug. 31. The BSP ensures liquidity and credit growth supports its inflation and financial stability mandates.
Domestic liquidity (M3) increased by seven percent year-on-year in July, slower compared to June’s 7.2 percent. In peso terms, M3 expanded to P15.38 trillion in July versus P15.44 trillion in June.
The BSP has started its pandemic measures’ exit strategy. “As the BSP proceeds with the withdrawal of monetary accommodation, it will continue to ensure that domestic liquidity conditions remain conducive to sustaining the economic recovery, in line with the BSP's price and financial stability objectives,” it said.
The universal and commercial banks’ outstanding loans net of RRPs amounted to P10.21 trillion in July, up 12 percent from P9.12 trillion same period last year.
The outstanding loans to residents, net of RRPs, went up by 11.9 percent year-on-year in July to P9.92 trillion. Banks’ loans to productivity sectors rose by 11.6 percent to P8.98 trillion.
Based on BSP data, lending to real estate activities increased by 14.6 percent year-on-year in July to P2.09 trillion while loans to manufacturing sector rose by 16.2 percent to P1.17 trillion.
Borrowers from the information and communication sector took out P560.31 billion which was 29.3 percent higher year-on-year, while lending to wholesale and retail trade, repair of motor vehicles and motorcycles rose by 9.3 percent to P1.16 trillion.
Consumer loans such as credit cards and motor vehicle loans, meantime, increased by 14.7 percent year-on-year in July to P934.71 billion.
In July, domestic claims under M3 data rose by 11.5 percent year-on-year due to the improvement in bank lending to the private sector.
Claims on the private sector went up by 8.9 percent with the sustained expansion in bank lending to non-financial private corporations and households, noted the BSP. Net claims on the central government rose by 22.2 percent in July because of National Government borrowings.
The BSP also reported that net foreign assets (NFA) in peso terms decreased by 0.5 percent in July after expanding by 5.6 percent in June.
“The BSP’s NFA position declined during the month, reflecting the decrease in gross international reserves relative to the same period a year ago. The NFA of banks likewise contracted mainly on account of higher foreign deposit liabilities and bills payable,” said the BSP.