Money supply growth picks up in Feb; bank lending slows

ABS-CBN News

Posted at Mar 31 2015 06:07 PM | Updated as of Apr 01 2015 02:07 AM

MANILA, Philippines - Money supply growth picked up in February, data from the Bangko Sentral ng Pilipinas showed.

BSP data showed M3 or the amount of cash circulating in the economy rose 8.5 percent in February, an improvement from 7.7 percent in January.

Month-on-month seasonally adjusted money supply in February climbed 1.4 percent.

"Domestic liquidity has continued to grow at a moderate pace during the month due in part to the increase in placements of trust entities in the BSP’s SDA facility relative to a year ago," the BSP said in a statement.

The BSP said it remains prepared to take appropriate measures if necessary to ensure that domestic liquidity stays adequate to support a non-inflationary growth trajectory.

Meanwhile, bank lending fell to a 15-month low in February.

The BSP said the growth of outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, slowed to 15.2 percent in February, from 17.3 percent in January.

Production loans, comprising about four-fifths of commercial banks' loan portfolios, grew 14.5 percent in February from a year earlier, slower than 16 percent in January.

Consumer loans grew 21.1 percent in February after a 20.5 percent rise in January.

"The BSP will continue to ensure that credit and liquidity conditions remain supportive of overall economic growth in a manner consistent with the BSP's price and financial stability objectives," it said.

The Philippines was Asia's fastest-growing economy after China in 2014, regaining momentum in the final quarter of the year on strong farm output and construction activity.

The BSP left its benchmark interest rate unchanged at percent on March 26, with inflation expected to stay within its comfort range this year and next while economic growth is seen to remain robust. - With Reuters