Bank lending slows, liquidity growth quickens in August — BSP

Bank lending continued to grow in August but at a slightly slower pace, while domestic liquidity expanded at a faster rate, the Bangko Sentral ng Pilipinas (BSP) reported Thursday.

Preliminary data showed outstanding loans from universal and commercial banks (U/KBs) rose 11.2 percent year-on-year in August, easing from 11.8 percent in July. Total lending during the month reached ₱13.61 trillion.

Loans to residents grew 11.6 percent, slower than July’s 12.4 percent, while loans to non-residents contracted 5.9 percent, a smaller decline than the 8.1 percent drop a month earlier.

Credit to businesses expanded by 9.9 percent, down from 10.8 percent in July, with higher lending to real estate activities; electricity, gas, steam and air-conditioning supply; wholesale and retail trade; financial and insurance activities; and information and communication.

Consumer loans to residents grew faster at 23.9 percent from 23.6 percent in July, supported by credit card, motor vehicle, and salary loans.

Meanwhile, domestic liquidity or M3 rose 6.6 percent year-on-year to about ₱18.6 trillion in August, quicker than the 6.2-percent expansion in July.

Growth in M3 was backed by a 9.8-percent rise in claims on the domestic sector, reflecting higher liabilities of private corporations and the government to banks. Net claims on the central government rose 6.1 percent, while claims on the private sector expanded 11.1 percent.

Net foreign assets also increased 4.8 percent in peso terms, reversing a 0.6-percent decline in July, as both the BSP and banks posted gains.

“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability mandates,” the central bank said.