Lending, M3 growth sustained
Money supply growth picked up slightly in May amid a slower expansion in bank lending, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Domestic liquidity or M3 expanded by 14.3 percent year on year to P11.032 trillion, marginally faster than April’s 14.2 percent. Month-on-month and seasonally adjusted, M3 increased by 1.3 percent.
“The overall pace of growth in M3 remains broadly in line with the BSP’s prevailing outlook for inflation and economic activity,” the central bank said in a statement.
Domestic claims growth, meanwhile, picked up to 16.8 percent from April’s 16.4 percent on sustained bank lending.
“Growth in bank loans continued to be driven by lending to key production sectors such as wholesale and retail trade, repair of motor vehicles and motorcycles; real estate activities; financial and insurance
activities; manufacturing; and electricity, gas, steam and air-conditioning supply,” the Bangko Sentral said.
Net claims on the central government grew by 17.3 percent, from the revised 13.1 percent previously, as a result of continued borrowings.
Net foreign assets (NFA) in peso terms, meanwhile, saw growth accelerated to 5.4 percent from the previous month’s 4.2 percent.
The central bank said its own NFA position increased in May, reflecting foreign exchange inflows coming mainly from overseas Filipinos’ remittances and business process outsourcing revenues.
The NFA of banks also expanded as growth in banks’ foreign assets increased on account of higher loans and investments in marketable debt securities.
Outstanding loans
Bank lending growth, meanwhile, eased to 19.4 percent from April’s revised 19.9 percent.
Including reverse repurchase placements (RRPs) with the central bank, growth slowed to 17.7 percent from the previous month’s 19.9 percent. Month-on-month and seasonally-adjusted, commercial bank lending for loans net of RRPs and loans inclusive of RRPs both increased by 1.2 percent, respectively.
Lending for production activities, which accounted for 88.5 percent of the aggregate loan portfolio, grew by 19.3 percent in May.
This was driven by wholesale and retail trade, repair of motor vehicles and motorcycles (23.4 percent); real estate activities (15.7 percent); financial and insurance activities (31.3 percent); manufacturing (17.7 percent); and electricity, gas, steam and air-conditioning supply (11.6 percent).
Bank lending to other sectors also increased during the month except in agriculture, forestry and fishing (-8.3 percent), and administrative and support services activities (-49.2 percent).
Household consumption loan growth decelerated to 18.4 percent from April’s 19 percent.
“The slower increase in motor vehicle loans salary-based general purpose consumption loans as well as the contraction in other types of household loans offset the faster expansion in credit card loans in May,” the central bank said.
The BSP said it would “continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives.”
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