Bank lending rises 8.8%, money supply expands to P15.2-T – Manila Bulletin

Large banks’ outstanding loans grew 8.8% in February, faster than January’s 8.4% growth, as lending activity picked up momentum on improving economy, said the Bangko Sentral ng Pilipinas (BSP).

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“Credit activity continues to gain momentum as the easing of COVID-19 related restrictions spur improved mobility and market demand,” the BSP said Thursday, March 31.

Domestic liquidity or M3, also known as money supply, rose 8.5% year-on-year to reach 15.2 trillion pesos in February.

“The BSP will ensure that domestic liquidity and credit conditions remain appropriate to maintain the momentum of the domestic economic recovery, to the extent predicted by the outlook for inflation and growth,” the BSP said.

In February, preliminary data showed that, net of reverse repurchase agreements (RRPs) with the BSP, bank lending on a seasonally adjusted monthly basis, increased by 0.4%.

Large banks’ outstanding loans to residents, net of RRPs, increased by 8.8% to reach 9,718 billion pesos against 8,936 billion pesos in the same period of 2021.

Loans for production activity increased by 9.7% year-on-year to reach 8,583 billion pesos, while consumer loans recorded only an increase of 0.9% to reach 860,449 billion pesos.

BSP noted that productivity loans were driven by increased credit for real estate activities, which rose 16 percent year-on-year to 2.051 billion pesos in February.

Loans granted for wholesale and retail trade, repair of motor vehicles and motorcycles, information and communication, financial and insurance activities, manufacture and supply of electricity, gas, steam and air conditioning grew by 5.7%, 33.3%, 13.2%, 11% and 0.4%, respectively.

As for consumer loans, the modest increase of 0.9% in February is an improvement on the decline of 0.4% in January. The increase came from credit card loans which increased by 8% to P438.253 billion. Car loans, however, fell 5.2% to 335.725 billion pesos, while general consumer loans based on wages also fell 8.4% to 71.977 billion pesos.

The BSP said it saw the opportunity to “safeguard the momentum of the economic recovery amid heightened uncertainty, although indications of a sustained improvement in credit activity allow the BSP to gradually unwind its pandemic-related interventions”.

At the same time, the 8.5% growth of M3 in February corresponds to the same rate of growth recorded in January. On a seasonally adjusted monthly basis, M3 increased by 0.3%.

The BSP said domestic claims rose 8.8 percent year-on-year in February, from 8.3 percent in January, due to growth in net claims on central government and continued improvement in bank lending. to the private sector.

Net claims on the central government increased by 21% due to sustained borrowing by the national government, while net claims on the private sector increased by 4.9%, as bank loans to private non-financial corporations increased, a indicated the BSP.

Net foreign assets (NFA) in pesos increased by 6.5% in February. “The expansion of the BSP’s NFA position reflects the increase in the level of the country’s gross international reserves compared to the same period a year ago. Similarly, the banks’ NFA increased as the banks’ foreign assets increased at a faster rate due to the increase in interbank loans receivable and deposits maintained with non-resident banks,” the BSP said.

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