Bank lending, liquidity growth up in March

BANK lending continued to accelerate in March with money supply rebounding from a four-month decline, the Bangko Sentral ng Pilipinas (BSP) reported late Thursday.

Preliminary data showed that the outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 9.4 percent from 8.6 percent in February.

This is the fourth consecutive month of pick-up and the highest bank lending growth recorded since April 2023 at 9.7 percent.

Month on month and seasonally adjusted, the expansion was at 1.3 percent.

Domestic liquidity or M3, meanwhile, expanded by 5.7 percent, improving from February's 5.1 percent to about P17.2 trillion.

It was up 0.9 percent month on month and seasonally adjusted.

Outstanding loans to residents net of RRPs grew by a faster 9.5 percent in March from 8.7 percent in the previous month. Those granted to nonresidents also went up to 9.1 percent from 6.5 percent.

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Loans for production activities went up by 7.7 percent from 6.8 percent, which the BSP said was largely due to an expansion in lending to industries such as real estate activities (11.5 percent); electricity, gas, steam, and air-conditioning supply (10.1 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (6.6 percent); construction (18.3 percent); manufacturing (4.9 percent); and transportation and storage (14.3 percent).

Growth in consumer loans to residents was steady at 25.4 percent, supported by a sustained increase in credit card, motor vehicle loans, and salary-based general-purpose consumption loans.

As for money supply, domestic claims saw growth expanding to 10.8 percent from February's revised 9.6 percent.

Claims on the private sector, in particular, grew by 10.9 percent from revised 10.3 percent amid a «sustained expansion in bank lending to non-financial private corporations and households,» according to the BSP.

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Net claims on the central government, meanwhile, grew by 15.0 percent from February's revised 12.0 percent, partly due to the decline in the deposits of the national government with the central bank.

In peso terms, net foreign assets (NFA) grew by 5.0 percent from