Bank loans grew 7.2 percent year-on-year in August 2023, slower than the 7.7-percent increase in July as higher interest rates tempered the demand for credit, data from the Bangko Sentral ng Pilipinas show.
Preliminary data released Wednesday showed that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the BSP, rose 0.6 percent on a month-on-month seasonally-adjusted basis.
Outstanding loans to residents, net of RRPs, also grew by 7.2 percent in August, compared to 7.7 percent in July.
The growth in outstanding loans for production activities eased to 5.5 percent in August from 6.2 percent in July.
The BSP, however, noted the sustained expansion in lending to key industries such as real estate (up 5.7 percent); electricity, gas, steam, and air-conditioning supply (9.0 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (7.1 percent); information and communication (10.7 percent); and financial and insurance activities (6.1 percent).
Meanwhile, the expansion of consumer loans to residents was broadly steady at 22.7 percent in August from 22.6 percent in July, due mainly to the growth in credit card and motor vehicle loans.
Outstanding loans to non-residents went up by 7.8 percent in August from 6.2 percent in the previous month.
The BSP kept the policy rate at 6.25 percent in the last four meetings to contain the elevated inflation rate.
Meanwhile, domestic liquidity or M3 grew by 6.8 percent year-on-year to about P16.5 trillion in August, faster than 5.7 percent in July.
The BSP said that on a month-on-month seasonally-adjusted basis, M3 increased by about 1.6 percent.
“Domestic claims expanded by 9.1 percent year-on-year in August from 8.9 percent in the previous month. Claims on the private sector grew by 7.3 percent in August from 8.2 percent in July, driven by the sustained expansion in bank lending to non-financial private corporations and households,” it said.
Net claims on the central government rose 14.7 percent in August from 12.5 percent in July due to the borrowings by the national government.
Net foreign assets (NFA) in peso terms increased 3.2 percent year-on-year in August following a 2.6-percent decline in July.
The BSP said it would continue to ensure that domestic liquidity conditions are in line with its price and financial stability objectives.