Money supply expansion slows in September 2018

Mary Grace Padin – The Filipino Star

November 1, 2018 | 00h00

MANILA, Philippines – National money supply growth slowed in September amid slowing bank lending expansion, according to Bangko Sentral ng Pilipinas.

Preliminary data from the BSP showed that the money supply, also known as M3, increased 9.7% to reach 11.16 trillion pesos at the end of September, from 10.17 trillion pesos recorded in the same period. last year.

This was, however, slower than the 10.4% increase in money supply recorded in August.

Overall liquidity conditions during September continued to be manageable and support the country’s economic growth needs, the PASB said. “The BSP will continue to closely monitor domestic liquidity dynamics to ensure that monetary conditions remain conducive to price and financial stability,” he added.

According to the central bank, domestic claims in September rose 14.5%, less than the 15% increase recorded the month before.

Lending for production activities was motivated by lending to key sectors, including wholesale and retail trade; repair of motor vehicles and motorcycles; real estate activities; manufacturing; financial and insurance activities; supply of electricity, gas, steam and air conditioning; and construction site.

Consumer lending to households also accelerated, driven by the faster expansion of auto loans, credit card loans, and salary-based general-purpose consumer loans.

Net claims on the central government rose 11 percent in September, faster than the 8.7 percent posted in August, fueled by increased borrowing from the national government.

In contrast, net foreign assets (NEA) expressed in pesos edged down 0.7% year-on-year in September, although slightly better than the 1.3% contraction the month before.

“BSP’s NFA position decreased in September compared to a year ago, reflecting the decline in gross international reserves. Meanwhile, banks ‘NFA has increased due to growth in banks’ foreign assets resulting from increased lending and investment in marketable debt securities, ”the central bank said.

At the same time, preliminary data from the BSP also showed that outstanding commercial bank loans, net of reverse repurchase agreements (RRPs) with the BSP, increased by 17.4% at the end of September to reach 7.94 trillion pesos compared to 6.76 trillion pesos a year ago. .

But the BSP said it was slower than the 18.9% expansion recorded the month before.

Likewise, the growth of bank loans, including RRPs, slowed to 16.3% in September from 18.4% the previous month.

Loans to productive activities, which represented 88.7 percent of the bank’s overall net loan portfolio of RRP, grew 17.2 percent year-on-year, also slower than the 19.1 percent posted on last month.

The central bank said the growth in producer loans was mainly due to increased lending to various sectors, namely wholesale and retail trade; repair of motor vehicles and motorcycles; real estate activities; manufacturing; financial and insurance activities; supply of electricity, gas, steam and air conditioning; and construction site.

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