Liquidity down, bank lending up in September — BSP

Domestic liquidity posted a slight decline in September, the Bangko Sentral ng Pilipinas (BSP) reported Monday.

Central bank data showed that domestic liquidity of M3 — the broadest measure of money in the financial system — stood at P15.353 trillion in September.

This is 0.2% lower than the P15.416 trillion, but 5.0% higher than the P14.622 trillion recorded in the same month last year.

Domestic claims for the month posted an annual increase of 10.8%, lower than the 11.4% growth recorded in August,  which the BSP attributed to the improvement in bank lending to the private sector.

Private sector claims increased by 10.1% in September, up from 8.9% in August, on the back of sustained expansion in bank lending to non-financial private corporations and households.

Net claims on the central government increased by 15.3%, slower than the 21.2% the previous month, owing to the sustained borrowing by the national government.

Data from the Bureau of the Treasury (BTr) show that the national government’s running debt hit a fresh record of P13.021 trillion in August, up 1% from P12.89 trillion as of end-July.

“Looking ahead, the BSP will continue to ensure that domestic liquidity conditions remain in line with the BSP’s price and financial stability objectives,” the central bank said.

In terms of bank lending, the central bank said outstanding loans of universal and commercial banks (U/KBs) net of reverse repurchase placements (RRPs) grew by 13.4% in September, faster than the 12.2% growth in August.

Outstanding loans to residents net of RRPs increased by 13.0%, faster than the 12.1% in August.

Loans for production activities climbed by 12.3%, driven mainly by higher lending to sectors such as real estate activities, manufacturing, information and communication, and the wholesale and retail trade, repair of motor vehicles, and motorcycles.

Consumer loans to residents increased by 20.5%, due to higher credit card loans, motor vehicle loans, and salary-based general purpose consumption loans.

“The continued expansion in lending activity and ample liquidity will support the recovery of economic activity and domestic demand,” the BSP said.

“Looking ahead, the BSP will ensure that liquidity and lending conditions remain consistent with its price and financial stability mandates,” it added. — RSJ, GMA News