M3, bank lending up in September
THE country’s money supply increased at a quicker rate in September as bank lending recovered, according to the Bangko Sentral ng Pilipinas (BSP).
Domestic liquidity (M3) jumped by 8.2 percent year-onyear to P14.6 trillion in September, the central bank noted in a statement on Friday, which was faster than the 6.9-percent pick up in August. M3 rose 1.3 percent month-on-month and seasonally adjusted.
Domestic claims soared 7.6 percent year-on-year in September, up from 6.7 percent the previous month, “due to the increase in net claims on the central government as well as the continued improvement in bank lending to the private sector,” the BSP said.
“On the back of sustained borrowings by the national government,” net claims on the central government improved 24.3 percent, down from the revised 23.4 percent in August.
In the meantime, the Bangko Sentral reported a 2.7-percent surge in bank loans, an uptick from a 2.7-percent acceleration a month prior.
“The observed increase in outstanding loans of U/KBs (universal and commercial banks) reflects the modest recovery in banks’ overall lending attitudes along with improved economic prospects owing to the gradual lifting of pandemic containment measures,” it explained.
On the other hand, commercial bank loans climbed by 0.6 percent month-on-month and seasonally adjusted.
Loans to locals expanded 3.2 percent net of reverse repurchase “driven by a recovery in loans for production activities.”
Outstanding production loans grew by 4.4 percent in September, improving from 3.1 percent in August, owing to increases in loans for real estate activities (7.2 percent); information and communication (26.6 percent); financial and insurance activities (6 percent); and manufacturing (4.4 percent).
The decline in outstanding loans to other sectors, such as agriculture, forestry and fishing (-11.9 percent); household activities as employers, undifferentiated goods and services (-23.3 percent); and wholesale and retail trade and repair of motor vehicles and motorcycles (-1.7 percent) tempered the overall rise in outstanding loans for production, the central bank pointed out.
Meanwhile, “due to the lesser contraction year-on-year in credit card, motor vehicle and salarybased general purpose loans, consumer loans to residents decreased at a slower rate of 7.8 percent in September compared to an adjusted 8.4-percent decline in August.
At the same time, the BSP reported that outstanding loans to nonresidents fell at a slower rate of 12-percent down from 16.6 percent in August.
“Together with the national government’s fiscal and health measures, keeping a steady hand on the BSP’s monetary policy levers should continue to help boost domestic demand and market confidence,” the central bank remarked.
In the future, in line with its pricing and financial stability mandates, the BSP said it will continue to provide appropriate monetary policy support to allow economic recovery to acquire traction.