MONEY SUPPLY continued to grow at the start of the second quarter although slightly slower than the previous month, even as bank lending accelerated, the Bangko Sentral ng Pilipinas (BSP) said in a statement released late Thursday.
M3 — the broadest measure of money within an economy — grew 14.2% to P10.9 trillion in April from P9.54 trillion in the same month last year, and increased 1% month-on-month.
It was a notch slower than the 14.4% expansion logged in March and was a reversal of the 0.1% contraction a year ago.
Of the amount in circulation, domestic claims grew 16.4% year-on-year, faster than the 14.5% increase logged in March due to “sustained bank lending.”
“Growth in bank loans continued to be driven by lending to key production sectors such as wholesale and retail trade, repair of motor vehicles and motorcycles; real estate activities; financial and insurance activities; electricity, gas, steam and air conditioning supply; manufacturing; other community, social and personal activities; transportation and storage; and information and communication,” the BSP said.
Meanwhile, net public sector claims rose 13% in April from 7% in March “as a result of continued borrowings by the national government.”
Net foreign assets (NFA), on the other hand, saw a 4.2% year-on-year expansion in April, slower than the 5.6% logged in the month-ago period.
“Foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and foreign portfolio investments drove the growth in the BSP’s NFA position,” the central bank explained.
“The NFA of banks also expanded as banks’ foreign assets increased on account of higher loans and investments in marketable debt securities,” it added.
BANK LENDING
Overall loans from commercial banks grew 19.9% to P7.46 trillion in April from P6.22 trillion logged in the same month last year, and higher than the P7.33 trillion in the previous month.
It accelerated from the 18.5% expansion in March.
According to the BSP, loans for production activities, which took up 88.5% of banks’ loan portfolio, increased to a 19.6% growth rate in April from 18.2% in the previous month.
These were driven primarily by higher loans to wholesale and retail trade, repair of motor vehicles and motorcycles (22.7%), real estate activities (15.7%); financial and insurance activities (27.1%); electricity, gas, steam and air conditioning supply (17.5 %); manufacturing (14.4%); other community, social and personal activities (81.1%); transportation and storage (30.9%); and, information and communication (24.6%).
Lending to the agriculture, forestry and fishing sector, and administrative and support services activities, however, declined by 6.8%, and 43.5%, respectively.
The loan growth for household consumption, meanwhile, moderated to 19% in April from 19.8% in March due to the easing of credit to credit cards, motor vehicle, and other household loans, which offset the faster expansion in salary-based general purpose consumption loans that month.
The central bank said while overall money supply and domestic credit remains “broadly in line” with its outlook for inflation and economic activity, it will still closely monitor the metric to ensure that monetary conditions are “conducive to maintaining price and financial stability.” — Elijah Joseph C. Tubayan

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