Domestic liquidity or money supply in the financial system grew 13.5 percent in May from a year ago to reach P8.7 trillion on sustained demand for credit, Bangko Sentral ng Pilipinas said Thursday. This was faster than the revised 12.8-percent expansion in April this year.
“The sustained expansion of M3 during the month indicates that money supply remains sufficient to support economic growth. Going forward, the BSP will continue to monitor liquidity and credit dynamics to ensure that monetary conditions remain consistent with maintaining price and financial stability,” Bangko Sentral said in a statement.
Meanwhile, outstanding loans of commercial banks, net of reverse repurchase placements with Bangko Sentral, expanded 17.7 percent year-on-year in May, faster than 15.6 percent in April.
Loans for production activities, comprising more than 80 percent of banks’ aggregate loan portfolio, increased 17.9 percent in April.
The expansion in production loans was driven primarily by increased lending to real estate activities, 22.3 percent; electricity, gas, steam and air-conditioning supply, 29.3 percent; wholesale and retail trade, repair of motor vehicles and motorcycles, 18.3 percent; financial and insurance activities, 21.1 percent; and information and communication, 43 percent.
Loans for household consumption grew 17.4 percent in May, also up from 16.8 percent in April due to the expansion in motor vehicle loans and sustained growth in credit card loans and salary-based general purpose loans.