Bank loans up 8.9%, money supply at P15.2T – Manila Bulletin

Outstanding loans from major banks rose 8.9% year-on-year in March, from 8.8% in February as the economy continued to open up and mobility restrictions eased.

On Thursday, May 5, the Bangko Sentral ng Pilipinas (BSP) also reported that domestic liquidity (M3) or money supply rose 7.6% year-on-year in March to reach 15.2 trillion pesos. However, this was a slower pace of growth compared to 8.5% in February.

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Loans from universal and commercial banks, net of reverse repurchase agreements (RRPs) with the BSP, have maintained their growth over the past eight months. “Lending activity gained ground as the improving number of Covid-19 cases in the country continues to support market confidence,” the BSP said.

Outstanding resident loans in peso value amounted to P9.5 trillion, net of RRPs.

Loans for production activities continue to increase in March, they increased by 9.5% year-on-year to reach 8,630 billion pesos, boosted by the increase in loans in the following sectors: real estate activities; information and communication; manufacturing; wholesale and retail trade, repair of motor vehicles and motorcycles; and financial and insurance activities.

Consumer loans, meanwhile, rose 3.6 percent year-on-year to P867.79 billion due to growth in credit card loans.

The BSP said it “continues to see the opportunity to preserve the momentum of the economic recovery amid heightened uncertainty about the outlook for growth and inflation” and that it “stands ready to take appropriate preventive measures as needed to ensure non-inflationary and sustainable growth in line with our core mandate to promote price stability and financial stability.

As for M3, the BSP said it will provide adequate support to liquidity conditions for the recovery of the economy, as allowed by the outlook for inflation and growth.

In March, based on M3 data, domestic claims increased by 7.3% year-on-year, compared to 8.8% in February, with improvements in bank lending to the private sector and an expansion in net claims on the central government, the PASB said.

Net claims on central government rose 13.3% in March from 21% in February due to sustained borrowing by the national government. On the other hand, the increase in bank credits to non-financial private companies and to households resulted in a 5.6% growth in claims on the private sector.

Still with regard to M3 data, net foreign assets (NFA) in pesos increased by 8.4% in March against 6.5% in February. The central bank said the expansion of the BSP’s NFA position reflected the higher level of gross international reserves. “Similarly, the NFA of banks increased as banks’ foreign assets grew at a faster pace due to higher investment in marketable debt securities and deposits held with nonresident banks,” the report said. BSP.

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