Growth in domestic liquidity or M3 slowed down to 21.1 percent year-on-year in May from the 26.3 percent increase registered in the previous month. On a month-on-month basis, seasonally adjusted M3 contracted by 1.1 percent in May after a 2.8 percent expansion in April.
Growth in the net foreign assets of depository corporations continued to drive M3, albeit at a slower pace of 32.6 percent from 37.9 percent in April. Net domestic assets likewise posted a decelerating growth trend at 6.4 percent from 12.5 percent in the previous month. In particular, growth in credit to the public sector slowed down to 11.8 percent from 18.2 percent during the same period. This was partly offset by the continued expansion in credit to the private sector, which rose by 5.8 percent from 5.2 percent, as lending to entities other than financial corporations was sustained during the month.
The BSP will continue to monitor closely developments in liquidity conditions, particularly as they are affected by the recently implemented monetary measures. This will help ensure that monetary conditions are consistent with the price stability objective.