BSP: Bank lending grows 13.7% in November

OUTSTANDING loans of universal and commercial banks, net of reverse repurchase placements with the Bangko Sentral ng Pilipinas (BSP), rose 13.7 percent in November from 13.9 percent in October last year.

The central bank on Wednesday disclosed that on a month-on-month, seasonally-adjusted basis, outstanding universal and commercial bank loans rose 0.3 percent.

“Sustained growth in credit and domestic liquidity will continue to support economic activity and domestic demand,” the BSP said in a statement.

“Looking ahead, the BSP will ensure that liquidity and lending dynamics remain consistent with its primary mandate of promoting price and financial stability,” it added.

Several banks have reported an increase in loans and credit card use as the economy continues to recover from the impact of the Covid-19 pandemic.

Furthermore, BSP reported that domestic liquidity (M3), which refers to the current supply of money in the economy, grew by 5.4 percent year-on-year to about P15.6 trillion in November. This is the same as the rate of expansion recorded in October. On a month-on-month seasonally-adjusted basis, M3 increased by 0.6 percent.

Domestic claims rose by 10.8 percent year-on-year in November from 11.0 percent in the previous month, with the steady pace of bank lending to the private sector.

Claims on the private sector grew by 10.4 percent in November from the same growth rate posted in October, due to the sustained expansion in bank lending to non-financial private corporations and households. Net claims on the central government also rose by 13.8 percent in November from 14.7 percent in October owing mainly to the borrowings by the National Government.

Meanwhile, net foreign assets (NFA) in peso terms declined by 1.8 percent in November from the 1.4-percent contraction in October. The NFA of banks fell mainly on account of higher bills payable. Similarly, the BSP’s NFA position contracted by 1.0 percent in November.

“Looking ahead, the BSP will ensure that domestic liquidity conditions remain appropriate to support the prevailing stance of monetary policy, and continue to prioritize its inflation control and financial stability objectives,” the central bank said.