Outstanding loans of universal and commercial banks, excluding their short term placements with the central bank, grew by 10.1 percent last November, faster than the 9.3-percent expansion previously, according to the Bangko Sentral ng Pilipinas (BSP) on Wednesday (Jan. 8).
In a press statement, the BSP also said commercial bank loan placements grew by 1 percent.
Loans for production expanded at a a rate of 8.1 percent in November from 7.5 percent previously. This type of loans comprised 87.2 percent of banks’ overall loan portfolio.
The BSP said the “sustained increase” in production loans was driven mainly by lending to real estate, financial and insurance businesses, construction and electricity, gas, steam and air conditioning supply sector.
Bank lending to other sectors also increased in November except to manufacturing which declined by 2.3 percent, mining which fell by 10.8 percent and other industries.
Bank loans for household consumption grew by 26.6 percent, mainly auto loans in November.
Initial data showed that domestic liquidity—the amount of cash and liquid assets circulating in the economy—expanded by 9.8 percent to about P1.4 trillion in November from the previous 8.5 percent growth.
The level of “money supply” increased by 1.7 percent.
“Demand for credit remained the principal driver of money supply growth,” the BSP said.
Domestic claims grew by 8.3 percent in November from 6.7 percent previously “due mainly to sustained growth in credit to the private sector.”
Net claims on the central government grew by 13.9 percent in November from 6.6 percent partly because of sustained increase in borrowing by the national government, according to the BSP.
Net foreign assets in peso terms expanded by 11.5 percent in November from 9.6 percent, supported by foreign exchange sent home by Filipinos overseas and earnings from business process outsourcing.
Net foreign exchange reserve of banks increased as their foreign assets grew because of higher loans and investments in debt securities.
The statement said the “BSP will continue to ensure that the expansion in domestic credit and liquidity remains consistent with its price and financial stability objectives.”