MANILA, Philippines - Lending by the country's biggest banks picked up in August on more demand for production and consumer loans.
The Bangko Sentral ng Pilipinas (BSP) said bank lending, excluding reverse repurchase placements with the central bank, grew 12.5% in August to P2.18 trillion, compared to the previous month's expansion of 11.7%.
Including central bank placements, loans extended by banks rose 9.8% to P2.3 trillion, faster than July's 8.9% growth.
The growth of loans for production activities, which comprised more than four-fifths of the total loan portfolio, accelerated to 12.7% in August from 12% in July. Similarly, consumption loans, such as credit card debt and auto loans, rose at a faster annual pace of 15.4% in August against 12.5% the previous month.
"The upturn in the credit cycle remains consistent with the robust pick-up in domestic demand and the rebound in global trade," said the BSP.
M3 growth slows
Meanwhile, growth in domestic liquidity or money supply (M3) slowed to 8.6% in August from 10.2% in July, the BSP also reported.
M3 is the broader measure of money circulating in the system. The BSP looks at M3 when setting monetary policy because of its impact on inflation.
The central bank said it will continue to keep a close watch on developments in domestic liquidity to ensure adequate funding to support the economy’s growth momentum.
"Despite the slowdown in the growth of domestic liquidity, credits extended to the private sector continued to increase, indicative of the growing confidence in the country’s growth prospects."