Big banks’ outstanding loans grew by 12.2 percent year-on-year in August as credit expansion continued, up from 12 percent in July, based on Bangko Sentral ng Pilipinas (BSP) data.
The BSP also reported on Friday, Sept. 30, that domestic liquidity (M3) or money supply increased by 6.8 percent year-on-year to P15.4 trillion. The M3 growth is slower than in July of seven percent. On a month-on-month seasonally-adjusted basis, the financial system’s money supply rose by 0.9 percent.
“The sustained expansion in credit activity and ample liquidity will continue to support the recovery of economic activity and domestic demand,” said the BSP in a statement. However the BSP again reiterated that it will balance liquidity and lending conditions to ensure price stability and financial resiliency. For September, they forecasts an inflation range of 6.6 percent to 7.4 percent.
Based on central bank data, the universal and commercial banks’ outstanding loans net of reverse repurchase (RRP) placements with the BSP, amounted to P10.36 trillion in August, up from P9.12 trillion same period in 2021.
Bank lending for production activities in August increased by 11.5 percent year-on-year to P9.07 trillion. This was, however, slower compared to 11.6 percent in July.
Borrowers for real estate activities took out more loans during the period which increased by 13.9 percent to P2.08 trillion. Meantime, manufacturing loans grew by 15.9 percent to P1.2 trillion while lending for information and communication sector also increased by 28.6 percent to P571.16 billion.
The BSP also reported a 9.7 percent increase in loans to wholesale and retail trade, repair of motor vehicles and motorcycles totalling P1.18 trillion while loans to the electricity, gas, steam and airconditioning supply went up by nine percent to P1.12 trillion.
As for consumer loans, this amounted to P950.79 billion or up by 18.3 percent, faster than the 14.7 percent growth in July. Consumer loans include credit cards, motor vehicle loans, and salary-based general purpose consumption loans.
Meanwhile, the country’s money supply continued to expand on account of domestic claims which increased by 11.5 percent year-on-year for the month of August.
The BSP noted the same rate of increase in July due to the improvement in bank lending to the private sector.
The private sector claims, on the other hand, rose by 9.1 percent from 8.9 percent in July on the back of “sustained expansion in bank lending to non-financial private corporations and households.”
The BSP said the net claims on the central government went up by 21.2 percent compared to 22.2 percent in July with the continued government borrowings to fund a recovering economy.