Bangko Sentral ng Pilipinas. (File photo / Philippine Daily Inquirer)
The Philippine economy is showing signs of warming up further as lending activities of large banks grew for the third month in a row in October and at their fastest yet, even as growth of the country’s money supply slowed slightly.
According to the Bangko Sentral ng Pilipinas (BSP), preliminary data show that growth in outstanding loans of universal and commercial banks— net of short-term loans to the BSP—revved up to 3.5 percent year-on-year.
Bank lending grew 2.7 percent year-on-year in September and 1.3 percent year-on-year in August. October lending was 0.6 percent more than in September.
“The continued recovery in outstanding loans of [universal and commercial banks] reflects the expansion in business activity amid easing quarantine restrictions, declining COVID-19 cases, and increasing vaccinations,” the BSP said.
Outstanding loans to residents, net of short-term loans with the regulator, grew by 3.7 percent in October,faster than the 3.2 percent in September.
The central bank attributed this mainly to the continued increase in loans for production activities, which went up faster at 4.9 percent in October compared to the 4.4 percent in September.
This was backed by the growth in loans for real estate activities (7.6 percent); information and communication (27.7 percent); financial and insurance activities (11.5 percent), and manufacturing (5 percent).
The growth in lending for production was tempered by the decline in outstanding loans to other industries such as agriculture, forestry and fishing (-6.8 percent).
Consumer loans to residents again fell at a slower rate of 7.2 percent in October after a 7.8-percent drop in September.
This was due to the slight year-on-year increase in credit card loans and the slower contraction in salary-based general purpose loans, the BSP said.
Also, there was a slower decrease in outstanding loans to nonresidents, pegged at by 3.7 percent in October from 12 percent in September.
Meanwhile, domestic liquidity grew by 8.2 percent year-on-year to about P14.6 trillion in October, slightly slower than the 8.3-percent recorded in September—itself revised from 8.2 percent as shown by preliminary data.
On a month-on-month seasonally-adjusted basis, money supply increased by 0.7 percent.
“Looking ahead, the BSP will ensure appropriate liquidity conditions in order to preserve ongoing policy support to domestic economic activity, consistent with its price and financial stability objectives,” the regulator said. INQ