Bank lending grew at a slightly faster pace in May this year while domestic liquidity expanded by over 5 percent, the Bangko Sentral ng Pilipinas (BSP) has said.
Outstanding loans of universal and commercial banks (U/KBs) rose by 11.3 percent in May from 11.2 percent in April, preliminary data released late Monday showed.
The BSP said the increase was driven both by loans to businesses and individual consumers.
Outstanding loans issued by U/KBs during the month amounted to P13.37 billion from $13.25 billion in April.
Outstanding loans to residents expanded by 11.8 percent in May from 11.9 percent in April while loans to non-residents declined by 6.6 percent from a 10 percent decrease in the previous month.
Loans meant to fund business activities eased to 10.2 percent in May from 10.3 percent in April due to the slower expansion in lending to key industries such as real estate activities, wholesale and retail trade, repair of motor vehicles and motorcycles, and transportation and storage.
Loans to manufacturing fell by 3 percent in June.
Consumer loans to residents which include car, motorcycle, credit card, and general-purpose salary loans grew by 23.7 percent in May from 24 percent in April.
"The BSP monitors bank loans because they are a key transmission channel of monetary policy," the BSP.
Domestic liquidity (M3) or the amount of money in the economy, meanwhile, grew by 5.5 percent to P18.4 trillion in May, from 5.8 percent in April.
M3 is a broad measure of money supply that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash.
Claims on the domestic sector, which includes private and government entities, rose by 10.7 percent from 10.9 percent in April.
Claims on the private sector grew by 10.9 percent from 11.5 percent in the previous month, driven by the continued expansion in bank lending to non-financial private corporations and households.
Net claims on the central government increased by 9.1 percent from 9.3 percent, driven by its higher borrowings.
Net foreign assets (NFA) in peso terms decreased by 4.6 percent in May from the 0.2-percent decline in April.
The BSP’s NFA fell by 4.4 percent primarily due to the peso’s appreciation against the US dollar while banks’ NFA declined largely on account of higher foreign currency-denominated bills payable.
"Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives," the BSP said.
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