M3, lending growth further eased in March
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 01 May 2019 16:24:38 +0000
THE Philippines’ money supply posted its slowest growth in almost 11 years in March amid the deceleration in bank lending in the last five months, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Domestic liquidity or M3 expanded by 4.2 percent year-on-year to P11.379 trillion, slower than February’s 7.1 percent. It was also the slowest M3 growth since the 2.5 percent in April 2008.
Month-on-month and seasonally adjusted, M3 decreased by 1 percent.
“Demand for credit eased, but remained the principal driver of money supply growth,” the central bank said in a statement on Tuesday.
EDomestic claims expansion also slowed to 7.3 percent from February’s 11.7 percent, “due mainly to the sustained growth in credit to the private sector,“ it added.
Meanwhile, net claims on the central government contracted by 2.2 percent, a reversal of the previous month’s 8.3-percent expansion.
Net foreign assets in peso terms recovered as it grew by 2 percent, rebounding from the 1.5-percent decline posted in February.
“The BSP will monitor closely monetary conditions to ensure that liquidity in the financial system remains supportive of economic activity in line with the BSP’s objective of maintaining price stability,” the Bangko Sentral said.
Bank-lending growth, meanwhile, decelerated for the fifth consecutive month, to 9.9 percent in March from 13.7 percent the previous month.
Including reverse repurchase placements (RRPs) with the BSP, lending growth also moderated to 9.3 percent from February’s 13.9 percent.
On a month-on-month and seasonally-adjusted basis, commercial bank loans net and inclusive of RRPs dropped by 1.6 percent and 2.0 percent, respectively.
Lending for production activities, which accounted for 89.5 percent of the aggregate loan portfolio, grew at a slower 11.4 percent from 13.6 percent in February.
Although moderated, the growth in production loans was driven primarily by increased lending to the following sectors: financial and insurance activities (32.7 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (11.6 percent); real-estate activities (8.7 percent); manufacturing (10.6 percent); construction (41.7 percent); and, electricity, gas, steam and airconditioning supply (9.4 percent).
Bank lending to other sectors also increased during the month except those in other community, social and personal activities (-59.7 percent); professional, scientific and technical activities (-19.0 percent); mining and quarrying (-3.3 percent); and, human health and social-work activities (-0.2 percent).
Growth in household consumption loans dropped by 5.8 percent from 14.9 percent in the previous month “amid the deceleration in credit card loans and contraction in motor vehicle loans, salary-based general purpose consumption loans and other types of household loans during the month.”
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