Bank lending up 12%, money supply at P15.4T – BSP – Manila Bulletin

Outstanding loans from major banks rose 12% year-on-year in July, the same growth recorded in June, according to data from Bangko Sentral ng Pilipinas (BSP).

Net of reverse repurchase agreements (RRP) with the BSP, bank lending on a seasonally adjusted monthly basis increased by 0.6%.

Bank teller counting P1000 notes/Bloomberg photo

“Sustained growth in bank lending and liquidity will support the recovery of economic activity and domestic demand,” the BSP said on Wednesday, August 31. BSP ensures that liquidity and credit growth support its inflation and financial stability mandates.

Domestic liquidity (M3) rose 7% year-on-year in July, slower from 7.2% in June. Expressed in pesos, M3 rose to 15,380 billion pesos in July from 15,440 billion pesos in June.

The PASB has started its exit strategy from the pandemic measures. “As the BSP proceeds with the withdrawal of monetary easing, it will continue to ensure that domestic liquidity conditions remain conducive to sustaining the economic recovery, consistent with the BSP’s pricing and financial stability objectives,” did he declare.

Outstanding universal and commercial bank loans net of RRPs stood at 10.21 trillion pesos in July, up 12 percent from 9.12 trillion pesos in the same period last year.

Outstanding loans to residents, net of RRPs, rose 11.9 percent year-on-year in July to reach 9.92 trillion pesos. Bank lending to productivity sectors increased by 11.6% to 8.98 trillion pesos.

Based on data from the BSP, loans to real estate activities rose 14.6% year-on-year in July to reach 2,090 billion pesos, while loans to the manufacturing sector increased by 16.2% to reach 1 170 billion pesos.

Borrowers in the information and communication sector contracted 560.31 billion pesos, up 29.3% year-on-year, while loans to wholesale and retail trade, motor vehicle repair and motorcycles increased by 9.3% to reach 1,160 billion pesos.

Meanwhile, consumer loans such as credit cards and auto loans rose 14.7 percent year-on-year in July to 934.71 billion pesos.

In July, domestic claims based on M3 data increased by 11.5% year-on-year due to improved bank lending to the private sector.

Claims on the private sector increased by 8.9 percent with the sustained expansion of bank lending to private non-financial corporations and households, noted the BSP. Net claims on central government increased by 22.2% in July due to national government borrowing.

The BSP also reported that net foreign assets (NFA) in pesos fell 0.5% in July after rising 5.6% in June.

“BSP’s NFA position declined during the month, reflecting lower gross international reserves compared to the same period a year ago. Banks’ NFA also contracted mainly due to higher foreign deposits and notes payable,” the BSP said.

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