Preliminary data show that domestic liquidity (M3) grew by 14.0 percent year-on-year to about ₱10.4 trillion in November 2017, slower than the 14.8-percent expansion in the previous month. On a month-on-month seasonally-adjusted basis, M3 increased by 0.3 percent.
Domestic claims grew by 14.7 percent in November, lower than the 15.2-percent increase in October as growth in credit to the private sector eased to 16.0 percent from 16.5 percent in the previous month. Growth in bank loans continued to be driven by lending to key production sectors such as real estate activities; electricity, gas, steam and airconditioning supply; wholesale and retail trade, repair of motor vehicles and motorcycles; financial and insurance activities; manufacturing; and information and communication.
Similarly, net foreign assets (NFA) in peso terms grew by 1.9 percent year-on-year in November from 6.1 percent in the previous month. The BSP’s NFA position declined during the month, reflecting the decrease in gross international reserves. Meanwhile, the NFA of banks expanded but at a slower pace, even as banks’ foreign assets continued to increase as a result of higher loans and investments in marketable debt securities.
The growth in M3 remains broadly consistent with the BSP’s prevailing outlook for inflation and economic activity. The BSP will continue to monitor monetary conditions closely to ensure that domestic liquidity stays adequate to support price and financial stability.