The growth in bank lending as well as domestic liquidity both slowed down month-in-month in November, the Bangko Sentral ng Pilipinas said Friday.
Citing preliminary data, the BSP said outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the central bank, grew by a slower 19.2 percent year-on-year last month from 19.9 percent in October, even as lending inclusive of RRPs expanded by a faster 18.3 percent from 18 percent in the previous month.
“Loans for production activities—which comprised 88.4 percent of banks’ aggregate loan portfolio, net of RRP—grew albeit at a slower rate of 18.5 percent in November from 18.7 percent in October,” the BSP said.
Production loans to the following sectors increased last month: Information and communication (up 31.4 percent year-on-year); electricity, gas, steam and airconditioning supply (up 24.2 percent); financial and insurance (up 23.1 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (up 18.5 percent); real estate (up 18.3 percent), and manufacturing (up 11.5 percent).
However, bank lending to administrative and support services as well as public administration, defense and compulsory social security activities declined by 31.5 percent and 2.1 percent, respectively.
As for household consumption, loan growth also slowed to 20.6 percent in November from October’s 23.4-percent expansion.
“The acceleration in the growth in credit card loans was offset by the slower increase in motor vehicle loans and salary-based general purpose loans as well as the decline in other types of household loans,” the BSP explained.
Meanwhile, money supply, expressed as M3, grew 14 percent year-on-year to P10.4 trillion in November, a slower increase from 14.8 percent in October, preliminary BSP data showed.
M3 refers to the increase in domestic liquidity or the amount of money circulating in the system.
According to the BSP, “domestic claims grew by 14.7 percent in November, lower than the 15.2-percent increase in October as growth in credit to the private sector eased to 16 percent from 16.5 percent in the previous month.”
Growth in bank loans continued to be driven by lending to key production sectors such as real estate activities; electricity, gas, steam and airconditioning supply; wholesale and retail trade, repair of motor vehicles and motorcycles; financial and insurance activities; manufacturing, and information and communication,” the BSP added.
Also, the BSP said net foreign assets (NFA) in peso terms grew by 1.9 percent year-on-year in November.
“The BSP’s NFA position declined during the month, reflecting the decrease in gross international reserves. Meanwhile, the NFA of banks expanded but at a slower pace, even as banks’ foreign assets continued to increase as a result of higher loans and investments in marketable debt securities,” according to the BSP. —BEN O. DE VERA