By Lee C. Chipongian

Big banks’ outstanding loans grew by 18.9 percent year-on-year in August, a slower pace of growth than the previous month’s 19.6 percent, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

Domestic liquidity measured as M3, in the meantime, also expanded slower in August, it was up by 10.4 percent year-on-year to P11.2 trillion. The July M3 grew faster by 11 percent in comparison.

BSP data show that with reverse repurchase (RRP) placements with the central bank, bank lending also slowed down at 18.4 percent in August from 18.7 percent in the previous month. On a month-on-month seasonally-adjusted basis, loans net of RRPs and loans inclusive of RRPs went up by 1.2 percent and 0.6 percent, respectively, said the BSP.

In peso terms, total bank loans amounted to P7.84-trillion net or RRPs and P8 trillion with RRPs in August. The BSP said it “will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth.”

Loans extended for production activities which accounted for 88.6 percent of total loans net of RRP, grew by 19.1 percent in August to P6.95 trillion.

Lending to the wholesale and retail trade, repair of motor vehicles and motorcycles increased by 24.5 percent to P1.08 trillion while loans to the financial and insurance activities, real estate activities went up by 37.2 percent and 15.6 percent respectively, to P735.31 billion and P1.32 trillion. Lending to the manufacturing sector, in the meantime, increased by 19.9 percent to P1.03 trillion, while loans to electricity, gas, steam and airconditioning supply went up by 12 percent to P878.92 billion. Borrowers in the construction sector contributed P243.51 billion, or up 36.9 percent year-on-year.

Household consumption loans, on the other hand, slowed down to 15.8 percent in August from 16.9 percent growth in July. The BSP said this is “due to the slower expansion in credit card loans and motor vehicle loans, as well as the decline in salary-based general purpose consumption loans and other types of household loans during the month.”

Lending extended to household consumption amounted to P620.17-billion. Motor vehicle loans totaled P280.67 billion while credit card loans amounted to P258.54 billion. The BSP, in a separate report, said domestic liquidity increased by 10.4 percent in August due to domestic claims’ 15 percent expansion, although also slower than July’s 16.1 percent because of the moderate growth in credit to the private sector.

“The overall pace of growth in M3 remains in line with the BSP’s outlook for inflation and economic activity,” said the BSP, adding that it will closely monitor domestic liquidity dynamics so that “monetary conditions remain conducive to price and financial stability.”