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MANILA, Philippines - Bank lending picked up even as money supply growth eased in March.
In a statement, the BSP said money supply or domestic liquidity grew 5.6 percent on-year, or slower than the 7.2 percent expansion in February.
Growth emanated from the continued rise in net foreign assets, which grew 11.8 percent. The BSP's net foreign assets position led the growth, increasing 14.3 percent on the back of remittances, merchandise export receipts and portfolio investments.
In a separate statement, the BSP said bank lending accelerated to 18.7 percent last March from 18 percent the month before.
Including overnight borrowing from the BSP, banks' credit activity also rose at a faster pace of 17.7 percent from 16.1 percent last February.
Bulk of the credit - at four-fifths of banks' total loan portfolio - went to production activity, rising 19.3 percent in March from the 18.4 percent growth the previous month.
Borrowing by the wholesale and retail trade sector rose the fastest at 58 percent, followed by manufacturing at 35 percent. Lending to the financial intermediation sector rose 32.1 percent, followed by real estate, renting and business services, 25.1 percent.
Consumer lending growth however slowed to 18.5 percent from 20.3 percent last February. The BSP blamed the slowdown on weaker auto loans and credit card receivables.
"The sustained growth of bank lending is expected to support real sector activity in the months ahead amidst an uncertain global economic environment. Going forward, the BSP will continue to monitor economic developments to ensure that the monetary policy stance remains consistent with the price stability objective and supportive of non-inflationary growth," Governor Amando M. Tetangco Jr. said.
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