Big banks’ lending grew by 10.7 percent year-on-year in August versus 10.4 percent in July while domestic liquidity expanded more slowly during the period, based on the latest data from the Bangko Sentral ng Pilipinas (BSP).

The outstanding loans of universal and commercial banks, minus reverse repurchase (RRP) placements with the BSP, on a month-on-month seasonally-adjusted basis went up by 0.8 percent.

The BSP said the outstanding loans to residents, net of RRPs, increased by 10.9 percent in August from 10.4 percent in July while outstanding loans to non-residents grew at a slower pace of 1.5 percent in August compared to 9.2 percent in July.

RRPs which are open to universal and commercial banks, thrift banks and non-banks are BSP monetary instruments where the BSP sells government securities from a bank with a commitment to buy them back at a later date.

The BSP said it will “continue to ensure that domestic liquidity and lending conditions are aligned with its price and financial stability objectives” and that money supply conditions “are consistent with the prevailing stance of monetary policy.”

Domestic liquidity or M3 grew by 5.5 percent year-on-year in August to P17.4 trillion. The latest M3 expanded at a slower rate compared to 7.3 percent in July.

On a month-on-month seasonally-adjusted basis, M3 fell by about 0.1 percent.

Data showed domestic claims grew by 10 percent year-on-year in August, compared to 11.4 percent in July.

As for claims on the private sector, this increased by 11.9 percent in August from 12 percent in July due to the sustained expansion in bank lending to non-financial private corporations and households, said the BSP. Net claims on the central government likewise grew by 8.5 percent but lower than 14.1 percent in July  on account of government borrowings.

Net foreign assets (NFA) in peso terms was up by 2.4 percent year-on-year in August versus 11.2 percent in July. The BSP noted its own NFA grew by 7.7 percent but the NFA of banks “contracted largely due to higher bills and bonds payable.”

Meanwhile, bank lending net of RRPs totaled P12.25 trillion in August. Gross total was at P12.515 trillion.

Data indicated that loans for production activities increased by 9.4 percent to P10.473 trillion in August, a faster pace of growth compared to 8.8 percent in July.

Lending growth was driven by loans to key industries such as real estate activities which grew 13.2 percent to P2.497 trillion; wholesale and retail trade, repair of motor vehicles and motorcycles which was up 10.7 percent to P1.4 trillion; and manufacturing grew 9.8 percent to P1.279 trillion.

Consumer loans in August also increased by 23.7 percent to P1.447 trillion compared to 24.3 percent in July. 

This was led by credit card loans of P827.431 billion which was up 27.4 percent year-on-year; motor vehicle loans worth P429.587 billion or up 19.3 percent; and salary-based general purpose consumption loans which increased 16.4 percent to P154.567 billion.