MORE MONEY circulated in the economy in January as bank lending continued to expand, though at a slower pace, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Domestic liquidity or M3 — the broadest measure of money in an economy — grew by 12.8% to reach P10.6 trillion in January, the central bank said in a statement.
The pace picked up from the 11.9% pickup posted in December, marking the fastest pace since November’s 14%.
Month on month, money supply rose by two percent.
Funds from domestic sources grew by 13.5% in January — a softer increase from the 13.7% pace clocked the preceding month — as bank loans grew at a slower pace, with the credits going largely to productive sectors.
Net claims on the national government rose further by 3.1% from two percent the preceding month. The BSP said this was “partly a result of increased borrowings by the national government.”
On the other hand, net foreign assets picked up by 4.1% year-on-year when expressed in peso, slower than the 2.2% increase in December. This reflects bigger dollar inflows from worker remittances, business process outsourcing sales and bigger hot money inflows.
Foreign assets held by banks also picked up faster on the back of bigger loans and investments in debt papers.
“The growth in M3 is consistent with the BSP’s prevailing outlook for inflation and economic activity,” the central bank statement read.
CREDIT GROWTH EASES
Bank lending softened anew in January even as it continued to expand by double-digit pace.
Credit growth picked up by 19.1% for the month, slower than December’s upward-revised 19.4% pickup.
Including reverse repurchase agreements held by banks, lending picked up by 18.3%, slightly below the 18.4% rise the prior month.
About 88.4% of bank credit went to production activity, growing by 18.1%.
The information and communication sector saw the biggest increase in borrowing in January at 52.6%, according to central bank data.
Other industries which got bigger loans were electricity, gas, steam and airconditioning supply (up 24.8%); real estate (18%); financial and insurance activities (15%); and wholesale and retail trade, repair of motor vehicles and motorcycles (13.2%).
Loans extended to the manufacturing sector also grew by 11.9%, the BSP said.
In contrast, loans for administrative and support services as well as agriculture, forestry and fishing declined by 43.2% and 11.6%, respectively.
Growth in consumer lending likewise eased to 20.3% from 20.8% in December given slower increases in car loans, salary-based borrowings and other types of retail borrowings. This came despite a faster pickup in credit card loans.
The central bank closely monitors liquidity and bank lending dynamics to ensure price and financial stability. — Melissa Luz T. Lopez