GROWTH in both money supply and bank lending slowed down in August, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
Domestic liquity or M3 — the broadest measure of money within an economy — grew 10.4% to P11.2 trillion in August from P10.11 trillion logged in the same month last year.
It was also slightly lower than the 11% growth rate logged in July.
Domestic claims grew 15% in August, slower than the 16.1% in July “owing to the slower growth in credit to the private sector.”
The BSP said loans for production activities continued to be driven by lending to sectors in wholesale and retail trade, repair of motor vehicles and motorcycles; financial and insurance activities; real estate activities; manufacturing; electricity, gas, steam and airconditioning supply; and construction.
Loans for household consumption, on the other hand, decelerated “owing to the contraction in credit card loans and motor vehicle loans, as well as the decline in salary-based general-purpose consumption loans and other types of household loans.”
Meanwhile, net claims on the central government grew slower in August at 8.7% from 12.3% in July on account of higher deposits of the national government with the BSP.
Net foreign assets (NFA) in peso terms contracted by 1.3% from last year, coming from a 0.1% increase in July, “reflecting the decrease in gross international reserves.”
“Meanwhile, the NFA of banks also contracted as banks’ foreign assets grew at a slower pace relative to the growth in their foreign liabilities. Banks’ foreign liabilities expanded due mainly to the higher placements and deposits made by foreign banks with their local branches,” the BSP said.
The central bank said the overall pace of growth in M3 remains “in line with the BSP’s outlook for inflation and economic activity.”
“The BSP will continue to closely monitor domestic liquidity dynamics to ensure that monetary conditions remain conducive to price and financial stability.”
Meanwhile, bank lending slowed to 18.9% in August, compared to July’s 19.6% rise.
Counting reverse repurchase deals as well, total loan growth stood at 18.4% in August, compared to 18.7% in the previous month.
Loans for production activities, which took up 88.6% of banks’ aggregate loan portfolio, slipped slightly to 19.1% in August from 19.7% in July.
The loans were extended to industries in wholesale and retail trade, repair of motor vehicles and motorcycles; financial and insurance activities; real estate activities; manufacturing; electricity, gas, steam and airconditioning supply; and, construction.
However, bank lending to the agriculture, forestry and fishing declined by 25.2%.
Lending for retail borrowers slowed to 15.8% in August from July’s 16.9% climb “due to the slower expansion in credit card loans and motor vehicle loans, as well as the decline in salary-based general purpose consumption loans and other types of household loans during the month.”
“The BSP will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” the central bank said. — Elijah Joseph C. Tubayan