Preliminary data show that outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, decreased by 2.0 percent year-on-year in June after declining by 4.0 percent in the previous month.
On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, went up by 1.1 percent.
Data from the Bangko Sentral ng Pilipinas showed outstanding loans to residents, net of RRPs, fell by 1.4 percent from 3.5 percent contraction in May while outstanding loans to non-residents1 decreased by 19.7 percent from 18.8 percent decline last month.
BSP said this was primarily due to concerns over the spread of new coronavirus variants that continue to temper market sentiment and the outlook for economic recovery.
Consumer loans to residents went down by 8.6 percent in June from a 9.2-percent decrease in May as motor vehicle loans and salary-based consumption loans declined further.
Likewise, outstanding loans to major industries continued to fall but at a slower rate, attributed mainly to wholesale and retail trade and repair of motor vehicles and motorcycles (-6.2 percent) and manufacturing (-5.8 percent).
The contraction in outstanding loans to these key sectors was partly moderated by the growth in loans to real estate activities (4.8 percent), information and communication (9.1 percent), electricity, gas, steam, and air conditioning supply (2.2 percent), and transportation and storage (6.8 percent).
On balance, total outstanding loans for production activities, net of RRPs, posted a lower contraction by 0.6 percent in June from a 2.9-percent fall in May.
Meanwhile, preliminary data show that domestic liquidity (M3) expanded by 6.4 percent year-on-year to about P14.4 trillion in June 2021. This was faster than the 4.7-percent growth recorded in May. On a month-on-month seasonally-adjusted basis, M3 rose by 1.0 percent.
Domestic claims grew by 5.3 percent year-on-year in June from 2.6 percent in the previous month due mainly to the expansion in net claims on the central government, even as bank lending to the private sector remained weak.
Net claims on the central government rose by 27.8 percent in June from a 22.6-percent expansion in May on the back of sustained borrowings by the National Government.
Net foreign assets (NFA) in peso terms rose by 12.7 percent in June from 14.5 percent in May.
The expansion in the BSP’s NFA position reflected the increase in the country’s gross international reserves relative to the same period a year ago. Meanwhile, the NFA of banks expanded at a slower pace as banks’ foreign liabilities rose on account of higher bills payables.
BSP said it will ensure that domestic liquidity remains ample to allow the economic recovery to gain traction, in line with the BSP’s price and financial stability objectives.
“Moving forward, the BSP shall continue to provide policy support to complement the National Government’s ongoing initiatives to combat the effects of the COVID-19 pandemic on the economy,” BSP said.
