M3 growth picks up amid lending expansion
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Thu, 31 Oct 2019 17:07:30 +0000
GROWTH in the country’s money supply accelerated in September amid the steady expansion of bank lending, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
In a statement, the central bank said domestic liquidity or M3 expanded by 7.7 percent year-on-year to P12.03 trillion, faster than August’s revised 6.3 percent. Month-on-month and seasonally adjusted, M3 increased by 1.5 percent.
Domestic claims grew at a quicker pace at 7.5 percent from August’s revised 7.1 percent, mainly on “the sustained growth in credit to the private sector,” it added.
Net claims on the central government grew at a faster 6 percent from the revised 2.4 percent the month before, “reflecting the increased borrowings by the national government,” the BSP said.
Net foreign assets in peso terms, meanwhile, expanded by 8.3 percent from the previous month’s 8.9-percent growth.
Bank lending growth rose at a steady 10.5 percent in September, a rate similar to August’s.
Month-on-month and seasonally-adjusted, commercial bank lending for loans net of reverse repurchase increased by 0.8 percent.
Lending for production activities, which accounted for 87.4 percent of the aggregate loan portfolio, climbed by 9 percent, unchanged from August’s reported growth.
The sustained increase in production loans was driven primarily by lending to these sectors: real estate activities (18.3 percent); financial and insurance activities (17.6 percent); construction (36.2 percent); electricity, gas, steam and air conditioning supply (9.2 percent); and wholesale and retail trade, repair of motor vehicles and motorcycle (4.8 percent).
Bank lending to other sectors also increased, except those in professional, scientific and technical activities (-35.7 percent) and other community, social and personal activities (-39.8 percent).
Household consumption loan growth accelerated to 26.2 percent from August’s 25.4 percent “due to faster growth in motor vehicle, credit card, and salary-based general purpose consumption loans during the month,” the Bangko Sentral said.