QUEZON CITY, Aug. 2 – The Bangko Sentral ng Pilipinas said preliminary data show that domestic liquidity (M3) grew by 12.4 percent year-on-year to P8.7 trillion in June.
BSP noted that this was a slight deceleration from the 13.5-percent expansion recorded in May. On a month-on-month seasonally-adjusted basis, M3 decreased by 0.3 percent.
Money supply continued to expand due largely to sustained demand for credit. Domestic claims grew by 16.9 percent in June from 18.7 percent in May as credits to the private sector slowed marginally relative to the previous month. The bulk of bank loans during the month was channeled to key production sectors such as real estate activities; electricity, gas, steam and airconditioning supply; and wholesale and retail trade, repair of motor vehicles and motorcycles. Growth in net claims on the central government likewise moderated to 25.6 percent in June from 35.0 percent a month earlier.
Meanwhile, net foreign assets (NFA) in peso terms grew by 11.0 percent in June from 9.0 percent in the previous month. The BSP’s NFA position continued to expand during the month on the back of robust foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and portfolio investments. Meanwhile, the NFA of banks increased as banks’ foreign assets expanded at a faster pace than their foreign liabilities. Banks’ foreign assets increased due largely to the growth in their investments in marketable debt securities and interbank loans, while banks’ foreign liabilities grew mainly on account of deposits made by foreign banks.
The continued expansion of M3 in June indicates that money supply remains adequate to support economic growth. Moving forward, the BSP will continue to monitor monetary conditions closely in order to ensure that liquidity growth remains consistent with the BSP’s objectives of price and financial stability. (BSP)
