Big banks’ outstanding loans expanded by 10.4 percent year-on-year in July, a faster pace of growth than the previous two months of June and May which grew 10.1 percent both.
Based on Bangko Sentral ng Pilipinas (BSP) data, bank lending amounted to P12.142 trillion net of reverse repurchase (RRP) placements with the BSP. With RRP, gross value totaled P12.444 trillion.
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 also reported that in July, the financial system’s domestic liquidity or M3 expanded by 7.2 percent year-on-year to P17.488 trillion. This was higher compared to 6.6 percent in the previous month.
On a month-on-month seasonally-adjusted basis, the outstanding big banks’ loans -- net of RRPs -- went up by 0.8 percent. As for M3, this increased by 0.7 percent on a month-on-month seasonally-adjusted basis.
In July, the outstanding loans for production activities continued to grow by 8.8 percent year-on-year to P10.376 trillion. Major sectors such as real estate activities released more loans during the period or up 12 percent to P2.458 trillion.
Other sectors which registered increases are: professional, scientific, and technical activities, up by 438.3 percent to P218.308 billion; manufacturing loans rose 7.9 percent to P1.253 trillion; transportation and storage loans were up 20.6 percent to P455.932 billion; and wholesale and retail trade, repair of motor vehicles and motorcycles grew by six percent to P1.345 trillion.
Meanwhile, consumer loans went up by 24.3 percent in July to P1.424 trillion. This was a slower pace of growth than June’s 25 percent.
During the period, credit card loans increased by 28.2 percent to P810.432 billion; motor vehicle loans rose 19.9 percent to P424.925 billion; salary-based general purpose consumption loans went up by 16.5 percent to P153.613 billion; and “others” or loans not classified amounted to P35.502 billion, up by 27.2 percent.
The BSP said it will “continue to ensure that domestic liquidity and credit activity are aligned with its price and financial stability objectives.”
As for money supply, the central bank reiterated that it will balance domestic liquidity conditions which should be “consistent with the prevailing stance of monetary policy”.
Based on BSP data, domestic claims rose 11.3 percent year-on-year in July, higher than the 10.5 percent growth in June. Domestic claims refer to transactions with residents.
It noted that claims on the private sector increased by 11.9 percent versus 11.7 percent in June with the expansion in bank lending to non-financial private corporations and households.
Net claims on the central government, on the other hand, grew by 14 percent in July compared to 12.1 percent in the previous month partly due to sustained borrowings by the National Government.
Under M3, net foreign assets (NFA) in peso terms also increased by 11.2 percent year-on-year in July versus June’s 8.3 percent. NFAs are the net position of claims and liabilities to non-residents.
The BSP said its own NFA was up by 13.8 percent in July while the NFA of banks “contracted, largely on account of higher bills and bonds payable.”