Based on preliminary data, domestic liquidity (M3) grew by 9.9 percent year-on-year in November 2002 from 9.7 percent in the previous month, marking a sustained acceleration for the fifth consecutive month this year. Domestic liquidity rose to P1.612 trillion as of end-November 2002 from P1.598 trillion in the previous month.
The acceleration in the growth of money supply can be traced largely to the higher level of the net foreign assets (NFA) of the monetary system and partly to the increase in credits extended to the National Government. The unloading of dollars by the non-banking sector, including OFWs, in anticipation of the holiday season helped boost the NFA position of banks. This was further supported by the steady demand for government securities by investors, as reflected in the 6.6 percent year-on-year growth in the level of credits to the National Government as of end-November 2002. This growth rate, however, was slightly lower than the 9.4 percent increase recorded in the previous month.
Going forward, the BSP will continue to provide the necessary liquidity supportive of a sustainable economic growth path consistent with the BSP’s primary objective of maintaining price stability.