Feedback Corner

Publications and Research

Media Releases

Domestic Liquidity Growth Continues to Ease in October


Domestic liquidity (M3) grew by 15.4 percent year-on-year in October to reach P7.2 trillion. M3 growth decelerated from the 16.2-percent expansion recorded in September. The month-on-month seasonally-adjusted M3 growth was 0.9 percent.

Money supply continued to increase due largely to the sustained demand for credit. Domestic claims grew by 18.2 percent in October from 16.0 percent in the previous month, reflecting in part the continued expansion in credits to the private sector. In particular, the bulk of bank loans during the month was channeled to key production sectors such as manufacturing, real estate, renting, and business services, wholesale and retail trade, utilities, and financial intermediation. At the same time, public sector credit rose by 19.1 percent in October from 12.9 percent in September as the deposits of the National Government (NG) with the BSP decreased due largely to the withdrawal of funds by the NG for the redemption of maturing government securities and the release of internal revenue allotment (IRA) funds to local government units.

Meanwhile, net foreign assets (NFA) in peso terms grew at a slower pace of 3.4 percent in October from 3.9 percent in the previous month. The NFA of banks increased as banks’ foreign assets expanded at a faster pace relative to that of their foreign liabilities. Banks’ foreign assets continued to expand due mainly to the growth in their foreign loans and receivables and in their deposits with other banks, while banks’ foreign liabilities increased on account of higher deposits of foreign residents as well as placements made by foreign banks with their local branches. The BSP’s NFA position contracted relative to its level a year ago, reflecting the year-on-year decrease in gross international reserves.

Domestic liquidity growth is expected to moderate further in the months ahead as previous monetary policy adjustments continue to work their way through the economy. Going forward, the BSP remains prepared to take appropriate action as needed to ensure that monetary conditions continue to support price and financial stability.

View Table

RSS Subscribe for updates