BANK lending steadied and money supply edged higher in June amid still-high interest rates, Bangko Sentral ng Pilipinas (BSP) data issued late on Wednesday showed.
The outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew by 10.1 percent, unchanged from the previous month.
Month on month and seasonally adjusted, the expansion was at 0.4 percent.
Domestic liquidity or M3, meanwhile, grew by a slightly higher 6.6 percent to P17.5 trillion from May’s 6.5 percent.
It was also up 0.5 percent month on month and seasonally adjusted.
Outstanding loans to residents net of RRPs grew by a slower 10.1 percent from 10.2 percent, while those granted to nonresidents accelerated to 9.8 percent from 8.1 percent.
Loans for production activities also slowed by 8.3 percent from 8.4 percent.
These mostly comprised ending for real estate activities (12.3 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (9.3 percent); manufacturing (8.9 percent); transportation and storage (26.2 percent); and electricity, gas, steam and air-conditioning supply (5.7 percent).
Consumer loans to residents, meanwhile, also slowed to 25.0 percent from 25.6 percent amid a rise in credit card loans.
As for money supply, domestic claims growth eased to 10.5 percent from May’s 10.7 percent.
Claims on the private sector, in particular, edged up to 11.7 percent from 11.6 percent amid a “continued expansion in bank lending to nonfinancial private corporations and households,” the BSP said.
Net claims on the central government, meanwhile, slowed to 12.1 percent from 12.2 percent amid sustained government borrowings.
In peso terms, net foreign assets (NFA) expanded by 8.3 percent from 4.9 percent in May.
The central bank’s NFA position grew 12.3 percent while that of banks was said to have contracted “account of higher bills and bonds payable.”
The central bank said it would continue to “ensure that domestic liquidity conditions remain consistent with the prevailing stance of monetary policy, in line with its price and financial stability objectives.”
It will also “continue to ensure that domestic liquidity and credit activity remain in line with its price and financial stability objectives.”
Asked to comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that higher domestic and overseas interest rates had weighed on lending.
Easing inflation and expected rate cuts could spur loan demand, he added.
The BSP’s benchmark rate — used by banks to set their own lending rates — currently stands at 6.5 percent, the highest since 2007.
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