MANILA - Total loans of Philippine commercial banks rose 11.1% year-on-year in June to P2.2 trillion, faster than the 10.2% growth in May, on the back of easing interest rates, the Bangko Sentral ng Pilipinas (BSP) said Friday.
Excluding inter-bank loans, local banks' outstanding loans amounted to P1.99 trillion, up 14.3% from what was booked as of June last year. This, however, was slower than the 17.3% annual growth in May.
BSP Officer-In-Charge Nestor Espenilla Jr. noted that the stable growth in outstanding loans partly reflects the easing of monetary policy since the fourth quarter of 2008, "as the easier flow of credit continued to support the productive sectors of the economy even against the backdrop of tight liquidity conditions in global financial markets."
He added that the BSP would continue to monitor economic and financial developments to ensure that the monetary policy stance remains supportive of non-inflationary growth.
Meanwhile, the increase in bank lending led to the growth of the country's money supply.
The BSP said that money supply, measured in terms of M3, grew by 12.6% in June. This was lower than the 15% annual growth registered the previous month.
"Liquidity growth is one of the important variables considered in determining the BSP’s monetary policy stance. The continued strong growth of money supply indicates that the liquidity-enhancing measures earlier implemented by the BSP have continued to work their way through the banking system to ensure ample funding for the requirements of the economy," Espenilla said.
M3, which is a broad measure of money in a given economy, includes currencies in circulation, travelers’ checks, check deposits, time deposits, savings accounts, money market deposits, Euro-dollar deposits, and repurchase agreements, among others.
