Money supply up, lending down
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 05 Jul 2019 16:13:40 +0000
GROWTH in the country’s money supply eased anew in May amid the slower expansion in bank lending, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Domestic liquidity or M3 expanded by 6.4 percent year-on-year to P11.741 trillion, slower than April’s 7 percent. Month-on-month and seasonally adjusted, M3 accelerated by 1.6 percent.
“Demand for credit eased slightly, but remained the principal driver of money supply growth,” the BSP said in a statement.
Expansion in domestic claims also slowed to 6.8 percent from April’s revised 8.9 percent, “due mainly to the sustained growth in credit to the private sector,“ it added.
Meanwhile, net claims on the central government contracted by 6.4 percent, reversing the previous month’s revised 0.6-percent expansion.
Net foreign assets in peso terms grew by 4.4 percent, faster than the revised 3.9-percent decline posted in April.
“The BSP will continue to closely monitor domestic liquidity dynamics to ensure that overall monetary conditions remain in line with the BSP’s price and financial stability objectives,” the Bangko Sentral said.
Bank-lending growth, meanwhile, decelerated to 11.9 percent in May from 12.7 percent a month earlier.
Including reverse repurchase placements (RRPs) with the BSP, lending growth also moderated to 10.6 percent from April’s 12.8 percent.
On a month-on-month and seasonally-adjusted basis, commercial bank loans net of RRPs grew by 0.5 percent, while those inclusive of RRPs decreased by 0.7 percent.
Lending for production activities, which accounted for 88.2 percent of the aggregate loan portfolio, grew at a slower 11.5 percent from 12.4 percent in April.
Although moderated, the growth in production loans was driven primarily by increased lending to the following sectors: real-estate activities (13.6 percent); financial and insurance activities (21.2 percent); manufacturing (11.6 percent); electricity, gas, steam and air conditioning supply (13.1 percent); construction (43 percent); and wholesale and retail trade, repair of motor vehicles and motorcycles (9.3 percent).
Bank lending to other sectors also increased during the month except those in other community, social and personal activities (-55 percent) and professional, scientific and technical activities (-22.5 percent).
Growth in household consumption loans grew by 14.6 percent from 15 percent in the previous month, the BSP said, “as growth in credit card loans and other types of household loans during the month was slightly offset by the decline in salary-based general purpose consumption loans during the month.”
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