By Lee C. Chipongian
Big banks’ lending growth was lower in June, up 10.5 percent year-on-year compared to 11.9 percent in May, according to the Bangko Sentral ng Pilipinas (BSP).
The domestic liquidity growth remained at 6.4 percent, said the BSP, the same as in May. Money supply stood at P11.8 trillion in June.
“The BSP will continue to closely monitor domestic liquidity dynamics to ensure that overall monetary conditions remain in line with the BSP’s price and financial stability objectives,” said the BSP.
In peso value, outstanding loans totaled P8.423 trillion in June. With reverse repurchase placements in the BSP, bank lending was up by 10.5 percent to P8.159 trillion compared to 10.6 percent in May.
The BSP said loans for production activities which was bulk of the total at 88 percent share, went up by 9.8 percent in June but also a slower pace of growth than the previous month’s 11.5 percent. Loans for productivity sector amounted to P7.453 trillion.
The growth in production loans was driven primarily by lending to the following sectors: real estate activities (13.5 percent); financial and insurance activities (22.0 percent); electricity, gas, steam and air conditioning supply (13.5 percent), construction (42.5 percent); wholesale & retail trade, repair of motor vehicles and motorcycle (6.5 percent); and manufacturing (4.1 percent), noted the BSP.
Lending for household consumption rose by 15.3 percent in June from 14.6 percent in May, because of more credit card loans, as well as motor vehicle, and salary-based general purpose consumption loans, said the BSP. These consumer loans amounted to P705.33 billion.
In culling money supply, the central bank said demand for credit “eased slightly but remained the principal driver of money supply growth”, noting that domestic claims went up by 6.2 percent in June from 6.8 percent, mainly because of the sustained growth in credit to the private sector.
The BSP said net foreign assets (NFA) was up 5.3 percent in June from 4.4 percent in the last report. “The BSP’s NFA position expanded during the month, supported by foreign exchange inflows coming mainly from overseas Filipinos’ remittances and business process outsourcing receipts. By contrast, the NFA of banks decreased as their foreign liabilities rose due to increased placements and deposits made by foreign banks with their local branches and other banks,” said the BSP.