The growth of domestic liquidity or M3 increased to 15.6 percent year-on-year in March, higher than the previous month’s 14.6 percent. This was also considerably higher than the 2.1 percent expansion recorded during the same month a year ago. On a month-on-month basis, seasonally-adjusted M3 rose by 0.5 percent in March compared to the 0.9 percent decline in the previous month.
The steady rise in net foreign assets (NFA) continued to drive the expansion in domestic liquidity. NFA grew by 21.7 percent due mainly to the continued year-on-year expansion in the BSP’s foreign assets at 23.6 percent. In addition, the net foreign assets of other depository corporations (ODC) rose for the second month by 35.9 percent as their foreign assets increased and their foreign liabilities decreased.
Net domestic assets (NDA), which grew by 9.7 percent in March, also contributed to the rise in M3. Credits extended to the private sector rose by 18.0 percent. Similarly, public sector credit increased by 12.2 percent, as lending to the National Government (NG) and to local government units and other public entities increased.
BSP Governor Amando M. Tetangco, Jr. pointed out that the expansion in liquidity growth has not interrupted the downtrend in inflation; in fact, ample liquidity has provided fundamental support to the economy’s growth requirements amidst difficult global economic conditions.