Money Supply And Bank Lending Decelerates In August

Economic Research	4 October 2016
Philippines
Economic Highlights
Money Supply And Bank Lending Decelerates In August The broad money supply (M3) growth in the Philippines edged down to 11.8% y-o-y in August, from+13.1% in July and +12.4% in June, underpinned by a deceleration in both domestic claims and net foreign assets. Meanwhile, outstanding loans of commercial banks, inclusive of reverse repurchase placements (RRP) with the central bank, moderated to +15.9% y-o-y in August, from +16.0%in July and +16.1% in June, affected by slower growth in loans extended to businesss but partly mitigated by faster growth in loans to households. Going forward, the BSP will likely maintain its key policy rate at 3.0% for 2016 an in 2017, as inflation remains manageable and economic growth will likely hold up relatively well. Separately, the Philippines’ gross international reserves increased to USD85.9bn in August, following an increase of USD0.4bn in July. Moving forward, the peso is expected to stay weak and trade towards PHP47.00/USD by end-2016 and 47.50 by end-2017, from PHP46.86/USD by end-2015, contributed partly by a shrinking current account surplus in the balance of payments. Economist:  Rizki Fajar  | +6221 2970 7065
To access our recent reports please click on the links below: 23 Sep: Policy Rates Left Unchanged In September 19 Sep: Current Account Surplus Continues To Dwindle in 2Q 2016 09 Sep: Exports Continue To Contract By A Larger Magnitude in July 06 Sep: Inflation Moderates in August 01 Sep: Money Supply Picks Up But Bank Lending Decelerates In July 19 Aug: Economic Growth Continues to Accelerate On Stronger Consumption