Money supply and bank lending growth lost pace in December, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.

Domestic liquidity or M3 expanded by 11.9 percent year on year, down from November’s 14 percent, to P10.64 trillion. Month-on-month and seasonally adjusted, M3 decreased by 0.7 percent.

“The growth in M3 remains broadly consistent with the BSP’s prevailing outlook for inflation and economic activity,” the central bank said in a statement.

Growth in domestic claims slowed to 13.4 percent from 14.7 percent in November as credit to the private sector eased to 15.7 percent from 16 percent.

“Growth in bank loans continued to be driven by lending to key production sectors such as real estate activities; electricity, gas, steam and air-conditioning supply; wholesale and retail trade, repair of motor vehicles and motorcycles; manufacturing; and financial and insurance activities,” the BSP said.

Net claims on the central government likewise grew at a slower pace of 2.2 percent from 10.2 percent as national government deposits with the Bangko Sentral increased, mainly reflecting proceeds from a retail treasury bond offering during the month.

Strong demand led the Treasury bureau to issue P255.4-billion worth of RTBs in December.

Net foreign assets (NFA) in peso terms, meanwhile, grew by 2.3 percent from the previous month’s 1.9 percent.

The central bank said its own NFA position increased in December, reflecting foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts and foreign portfolio investments.

The NFA of banks, meanwhile, also expanded at a slower pace as growth in banks’ foreign assets eased on account of lower interbank loans and deposits with other banks.

Lending moderates

Bank lending growth, meanwhile, moderated to 19 percent from November’s revised 19.3 percent.

Including reverse repurchase placements (RRPs) with the central bank, growth decelerated to 18.1 percent from the revised 18.4 percent in the previous month. Month-on-month and seasonally-adjusted, commercial bank lending for loans net of RRPs and for loans inclusive of RRPs both increased by 0.7 percent.

Lending for production activities, which accounted for 88.9 percent of the aggregate loan portfolio, grew by 18.5 percent in December.

This was driven by real estate activities (19.3 percent); electricity, gas, steam and air-conditioning supply (25.4 percent); wholesale and retail trade; repair of motor vehicles and motorcycles (20.1 percent); manufacturing (11.7 percent); and financial and insurance activities (16.8 percent).

Bank lending to other sectors also increased except in agriculture, forestry and fishing (down 13.7 percent), and administrative and support services activities (down 30.4 percent).

Household consumption loan growth decelerated to 17.2 percent from November’s 20.6 percent.

“The slower increase in motor vehicles and salary-based offset the faster expansion in credit card loans and the growth in other types of household loans,” the central bank said.