Big banks’ total outstanding loans continued to expand in April but it dropped to a 14-month low of 9.7 percent year-on-year, based on the latest Bangko Sentral ng Pilipinas (BSP) data. The total outstanding loans, net of net of reverse repurchase (RRP) placements with the central bank, is lower compared to March’s 10.2 percent growth. The last time the universal and commercial banks reported a below 10 percent lending growth was in March 2022 of 8.9 percent. By the end of 2022, lending was more robust and it grew by 13.4 percent. According to the BSP on Wednesday, May 31, “the sustained expansion in bank lending activity suggests that domestic liquidity remains sufficient to support economic activity” and that it will “ensure that domestic liquidity and credit dynamics are consistent with the prevailing stance of monetary policy, in keeping with its price and financial stability mandates.” The BSP also released the latest domestic liquidity or M3 data which grew by 6.6 percent year-on-year to P16.25 trillion in April. This was higher compared to 6.2 percent M3 growth in March. On a month-on-month seasonally-adjusted basis, both bank lending and M3 increased. M3 went up by 0.5 percent while the outstanding universal and commercial bank loans, net of RRPs, also rose by 0.6 percent. In April, total net outstanding loans to residents and non-residents amounted to P10.86 trillion, up 9.7 percent from same time last year of P9.78 trillion. Productivity loans went up by 8.3 percent, lower from nine percent in March. These loans, which are for economic activity, amounted to P9.47 trillion during the period. Consumer loans, on the other hand, grew faster by 22.3 percent in April versus 21.8 percent in March, to P1.07 trillion. The BSP said that with the continued expansion in money supply, domestic claims increased by 11.9 percent year-on-year. Claims on the private sector grew by 9.7 percent with the sustained expansion in bank lending to non-financial private corporations and households, noted the BSP. Meanwhile, net claims on the central government rose by 20.1 percent in April “owing to the decline in the deposits of the National Government with the BSP.” As for net foreign assets (NFA) under M3, this decreased by 0.2 percent year-on-year in April. “The NFA of banks declined mainly on account of higher bills payable (while) the BSP’s NFA position expanded by 2.5 percent in April after contracting in the previous month,” said the BSP. The BSP also said that it will make sure money supply will remain consistent with the prevailing stance of monetary policy. Last May 18, the Monetary Board has paused its nine-cycle, tightening bias. The current policy rate remains at 6.25 percent. BSP Governor Felipe M. Medalla said they could continue to pause and hold in the next two to three policy meetings, which would be on June 22, Aug. 17 and Sept. 21. The BSP has raised the key rate by a cumulative 425 basis points in response to the US Federal Reserve's similar aggressive policy actions, and to contain high inflation and to ease exchange rate volatility.