The country’s money supply (M3) or the total money circulating in the financial system grew 11.8 percent year-on-year in August to Php 8.7 trillion, slower than the 13.1 percent growth in the previous month, the Bangko Sentral ng Pilipinas (BSP) reported Friday.
BSP traced this growth to continued demand for credit, with domestic claims rising by 14.9 percent from last July’s 16.5 percent “on the back of sustained increase in credits to the private sector.
MB FILE – Philippine bank notes / Photo courtesy of the Bangko Sentral ng Pilipinas
(Manila Bulletin)
Net claims on the central government posted an 18.2 percent hike from month-ago’s 25.4 percent due to withdrawals by the national government of its deposits with the central bank.
In peso terms, net foreign assets (NFA) last August rose by 8.8 percent from 12.5 percent in the previous month.
NFA is the difference between the central bank’s foreign assets less the liabilities to banks and quasi-banks.
The BSP said the central bank’s NFA position continued to be boosted by foreign currency-denominated inflows from Overseas Filipino Workers (OFWs), the business process outsourcing (BPO) sector and portfolio investments.
Banks’ NFA position was also robust due to deposits with other banks and investments in marketable debt securities.
“The data suggests that the expansion in M3 remains manageable and consistent with ensuring non-inflationary growth. Moving forward, the BSP will continue to monitor monetary conditions closely to ensure that liquidity in the system stays in line with price and financial stability,” the BSP said.
BSP data also show bank lending, excluding banks’ placements with the BSP’s overnight borrowing or reverse repurchase (RRP) facility rose by 17.3 percent, lower than month-ago’s 17.7 percent.
Including RRPs, it rose by 15.9 percent, little changed from the 16 percent last July.
Production loans, which account for 80 percent of the total, went up by 17.3 percent from the previous month’s 17.4 percent.
The rise was primarily due to the 43.2 percent hike in lending to the information and communication sector, the 30.9 percent increase of loans to electricity, gas, steam and air-conditioning supply and the 19.5 percent rise of loans for real estate activities.
Loans extended to the wholesale and retail trade, repair of motor vehicles and motorcycles rose by 15.9 percent; financial and insurance activities, 15.3 percent and manufacturing, 7.7 percent.
However, loans for public administration and defense, mining and quarrying and water supply, sewerage, waste management and remediation activities contracted by five percent, one percent and 0.6 percent, respectively.
Household loans during the same month rose by 20.3 percent as against the 20.6 last July “due to the sustained growth in salary-based general purpose loans, credit card loans and motor vehicle loans, which offset the decline in other types of household loans.”
Leave a Reply