• M3, lending growth accelerate in Feb

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    GROWTH in bank lending and money moderately accelerated in February and remained supportive of economic growth, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.

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    Domestic liquidity or M3 expanded by 11.8 percent in February, from January’s 11.5 percent uptick, to P8.433 trillion. Month-on-month and seasonally adjusted, M3 growth was 1.8 percent.

    “Money supply continued to expand due largely to sustained demand for credit,” the central bank said in a statement, adding that the liquidity level “remains adequate to support the requirements of economic growth.”

    Domestic claims grew by 16.7 percent, up from the 14.4 percent posted in January.

    The bulk of bank loans during the month went into manufacturing; real estate; electricity, gas, steam and air-conditioning supplies; wholesale and retail trade and the repair of motor vehicles and motorcycles; and information and communication.

    Lending to the public sector, meanwhile, expanded by 29.4 percent, faster than the 12.4 percent revised growth recorded in the preceding month.

    Net foreign assets (NFA) in peso terms grew by 9.3 percent from January’s revised 8 percent, the central bank said, noting that its own NFA position continued to expand due to robust foreign exchange inflows, coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and portfolio investments.

    The NFA of banks also increased as their foreign assets surged due to growth in their investments in marketable debt securities.

    Lending gains pace

    Bank lending, meanwhile, also expanded at a faster pace of 16.9 percent in February as loans for production activities accelerated despite moderation in household consumption.
    January’s bank lending growth was at 15.8 percent.

    Including reverse repurchase placements (RRPs) with the central bank, lending growth on a year-on-year basis rose to 15.7 percent in February compared to the 15.6 percent recorded the previous month.

    Month-on-month and seasonally-adjusted, commercial bank lending increased by 1.5 percent for loans net of RRPs, and by 0.8 percent for loans inclusive of RRPs.

    Lending for production activities, which accounted for over 80 percent of the aggregate loan portfolio, grew by 17.4 percent from January’s 16 percent.

    This was driven primarily by real estate activities, which accounted for 25.4 percent, followed by electricity, gas, steam and air-conditioning supply (36.4 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (16.1 percent); manufacturing (5.7 percent); and information and communication (27.7 percent).

    “Bank lending to other sectors likewise expanded during the month,” the central bank said.

    Loans for household consumption, meanwhile, grew by 15.7 percent compared with 16.3 percent in January, “due to the expansion of salary-based general purpose loans as well as sustained growth in credit card loans and motor vehicle loans.”

    “Going forward, the BSP will continue to ensure that domestic credit and liquidity conditions will keep pace with overall economic growth while remaining consistent with its price and financial stability objectives,” the central bank said.

    It also said that monetary authorities would “continue to monitor monetary conditions closely to ensure that liquidity in the financial system stays in line with maintaining price and financial stability.”

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