Loans from big banks or universal and commercial banks (UK/Bs), excluding investments in the central bank’s reverse repurchase (RRP), expanded at a slower rate of 11.8 percent in July from the 12.1-percent growth in June.

Broken down, the growth in outstanding loans to residents slowed to 12.4 percent in July from 12.6 percent in June, according to the latest data from the Bangko Sentral ng Pilipinas (BSP) released on Friday, Sept. 5.

Meanwhile, the contraction in outstanding loans to non-residents quickened by 8.1 percent during the month from the decline of 6.4 percent in June. Outstanding loans to non-residents cover those extended by big banks’ foreign currency deposit units (FCDUs) to borrowers abroad.

Loans supporting business activities expanded by a slower 10.8 percent in July compared with 11.1 percent in June.

According to the BSP, the expansion was driven mainly by higher lending to key sectors, including real estate activities (10.7 percent); electricity, gas, steam, and air-conditioning supply (30.3 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (8.5 percent); financial and insurance activities (13.1 percent); as well as information and communication (8.5 percent).

Consumer loans to residents grew by 23.6 percent in July, slower than the 24-percent growth in the previous month. These include credit card, motor vehicle, and general-purpose salary loans.

Domestic liquidity, or the amount of money in the economy, as measured by M3, expanded by 6.2 percent in July, reaching ₱18.6 trillion. This expansion rate was faster than June’s revised growth of 5.9 percent.

M3 is a broad measure of money supply that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash.

Claims on the domestic sector—which cover both private and government borrowers—were the drivers of the growth in money supply. However, it grew slower at 10.5 percent in July from 10.8 percent in June.

In particular, claims on the private sector eased to 11 percent during the month, slower than the 11.4-percent growth in June. The BSP attributed this growth to the “continued expansion in bank lending to non-financial private corporations and households.”

Similarly, net claims on the government moderated to 7.1 percent in July, from a faster 7.7-percent rate in the previous month, due to the government’s higher borrowings.