Manila:Bank lending and domestic liquidity in the Philippines experienced growth last September, as reported by the Bangko Sentral ng Pilipinas (BSP).

According to Philippines News Agency, BSP data released on Thursday indicated that bank lending growth accelerated to 11.4 percent from 11 percent in August. The outstanding loans of major banks reached PHP15.26 trillion, increasing from PHP15.12 trillion in August and surpassing the PHP13.38 trillion recorded in September of the previous year.

Outstanding loans to residents, which comprise the majority of total bank lending, expanded by 11.7 percent. Loans for business activities of resident enterprises grew by 11 percent, driven by increased lending to sectors such as electricity, gas, steam, and air-conditioning supply, manufacturing, real estate, transportation and storage, wholesale and retail trade, repair of motor vehicles and motorcycles, and financial and insurance activities. Additionally, consumer loans to residents rose by 16.2 percent due to the continued expansion in credit card and motor vehicle loans.

Meanwhile, domestic liquidity, or M3, increased by 9.3 percent to PHP20.7 trillion in September, supported by sustained growth in credit activity. M3 represents a broad measure of money supply, including currency in circulation, bank deposits, and other financial assets convertible to cash. The BSP noted that ongoing borrowing by both private and public sectors facilitated the expansion of the money supply. The national government's financing activities, such as debt issuances and withdrawal of deposits from the BSP and banks, also contributed to the growth in liquidity.

However, these positive trends were partially offset by a contraction in net foreign assets (NFA). The BSP's NFA declined by 2.3 percent, and banks' NFA also fell, reflecting a decrease in their holdings of foreign debt securities. The BSP emphasized its commitment to ensuring that domestic liquidity conditions align with its objectives for price and financial stability.