M3 up, bank lending steady in September

Bank lending inclusive of RRP grew 10.2 percent, a slight improvement from the posted 10 percent in August.

Domestic liquidity, also known as M3, grew at a faster rate in September, the Bangko Sentral ng Pilipinas (BSP) announced on Thursday.

Preliminary data from the BSP show September M3 growing 7.7 percent year-on-year, an accelerating from expansion averaging only 6.3 percent (revised) in August, which translates to about P12 trillion.

According to the central bank, demand for credit remained the primary growth driver of money supply acceleration during the month.

“Domestic claims grew by 7.5 percent in September from 7.1 percent (revised) in the previous month due mainly to the sustained growth in credit to the private sector,” the BSP said.

“Loans for production activities continued to be driven by lending to key sectors such as real estate activities; financial and insurance activities; construction; electricity, gas, steam and air-conditioning supply; and wholesale and retail trade, repair of motor vehicles and motorcycles,” it added.

Bank lending on the other hand, plateaued with universal and commercial bank outstanding loans net of reverse repurchase (RRP) placements with the BSP growing at a steady rate of 10.5 percent.

Meanwhile, bank lending inclusive of RRP grew 10.2 percent, a slight improvement from the posted 10 percent in August.

“On a month-on-month seasonally adjusted basis, commercial bank loans net of RRP grew by 0.8 percent,” the BSP said.

ING Bank senior economist Nicholas Mapa said while latest figures show an improvement in domestic liquidity, bank lending growth remain unchanged as investors wait for further cuts in the banks’ deposit reserve requirement ratio.

Also, the analyst said BSP Governor Benjamin Diokno’s earlier pronouncement that a good portion of the infused liquidity were invested in the local government securities market but found its way back to the central bank in the end.