M3, bank lending growth ease in June
MONEY supply and bank lending growth both decelerated in June, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.
Domestic liquidity or M3 expanded by 11.3 percent year on year to P11.058 trillion, slower than May’s 14.3 percent. Month-on-month and seasonally adjusted, M3 decreased by 0.1 percent.
“The overall pace of growth in M3 remains in line with the BSP’s prevailing outlook for inflation and economic activity,” the central bank said in a statement.
Domestic claims also grew at a slower pace of 16 percent from May’s 16.8 percent as bank lending expansion slightly eased.
“Meanwhile, loans for production activities continued to be driven by lending to key sectors such as wholesale and retail trade, repair of motor vehicles and motorcycles; real estate activities; financial and insurance activities; manufacturing; electricity, gas, steam and airconditioning supply; and other community, social and personal activities,” the Bangko Sentral said.
Net claims on the central government grew slower by 12.5 percent from 17.3 percent previously, as a result of
higher government borrowings.
Net foreign assets (NFA) in peso terms also saw growth decelerate to 2.4 percent from the previous month’s 5.4 percent.
The central bank said its own NFA position dropped in June, reflecting a decrease in gross international reserves.
The NFA of banks expanded at a slower pace even as banks’ foreign assets increased on account of higher loans and investments in marketable debt securities.
Outstanding loans
Bank lending growth, meanwhile, eased to 19.1 percent from May’s revised 19.3 percent.
Including reverse repurchase placements (RRPs) with the central bank, growth slowed to 17.6 percent from the previous month’s 17.7 percent. Month-on-month and seasonally-adjusted, commercial bank lending for loans net of RRPs and loans inclusive of RRPs both increased by 1.3 percent and 1.5 percent, respectively.
Lending for production activities, which accounted for 88.6 percent of the aggregate loan portfolio, grew by 19.2 percent in June from 19.3 percent in the previous month.
This was driven by wholesale and retail trade, repair of motor vehicles and motorcycles (24.9 percent); real estate activities (16.1 percent); financial and insurance activities (31.1 percent); manufacturing (17.8 percent); electricity, gas, steam and air-conditioning supply (10.3 percent); and other community, social and personal activities (95.5 percent)
Bank lending to other sectors also increased during the month except in agriculture, forestry and fishing (-7.8 percent) and administrative and support services activities (-52.9 percent).
Household consumption loan growth decelerated to 17.7 percent from May’s 18.4 percent.
“The expansion in credit card loans and salary-based general purpose consumption loans was moderated by the slower pace of growth in motor vehicle loans and the contraction in other types of household loans in June,” 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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