Bank lending at 9-mo low; money supply steady
MANILA, Philippines - Growth in lending by the country's biggest banks slowed to a nine-month low of 18% in February, while money supply growth was steady, the central bank reported Thursday.
The Bangko Sentral ng Pilipinas (BSP) said total loans net of reverse repurchase deals amounted to P2.76 trillion in February, up 18% from P2.34 trillion in the same month last year. The growth was the lowest since May, when loans rose 17.4%.
Production loans, comprising more than four-fifths of commercial banks' loan portfolios, grew 18.4% in February from a year earlier, slower than January's 19.7%.
Consumer loans climbed 20.3% in February from a year earlier, reflecting mainly the growth in credit card receivables. In January, annual growth was 19.9%.
Meanwhile, money supply rose 7.2% in the second month of the year to P4.52 trillion. The growth was the same as January's.
The BSP said in a statement the steady rise in money supply indicated that liquidity in the financial system remained ample to fund the economy's growth requirements.
Money supply is one of the indicators the central bank reviews when setting monetary policy because of its impact on inflation.
Inflation slowed for a fifth month in a row in March on lower utility and transport costs, but economists still expect the central bank to keep its key policy rate unchanged at a record low to guard against pressures from higher fuel prices.
The BSP cut its main policy rate by a quarter point to a record low of 4% in its March review to help cushion the economy from the impact of a global slowdown.
The Philippine government expects the economy to pick up pace this year, targeting growth of 5% to 6% after 2011 growth of 3.7%, below forecast. - With a report from Reuters