Metro Manila (CNN Philippines) — Domestic liquidity (M3) — the aggregate of currency and cash-equivalent securities circulating in the economy — grew at a slightly faster pace in May than the previous month, according to figures from the Bangko Sentral ng Pilipinas (BSP).
M3 reached P7.6 trillion — 9.3% higher than the same month last year. April’s M3, on the other hand, grew by 9.0%. On a month-on-month seasonally-adjust basis, M3 grew by 0.7%, the BSP added.
The BSP attributed the near-double-digit growth to sustained demand for credit. May saw domestic claims grow by 9.6% — compared to April’s 9.3% — as credit to the private sector continued to increase.
However, BSP figures also revealed that bank lending generally grew at a slower pace (14.5%) in May, from the 15.4% recorded in April. Net public sector credit contracted at a markedly slower pace of 3.5%, compared to April’s 7.9% decline.
Net foreign assets (NFA) in peso terms posted a slightly lower growth of 8.3% compared to May’s 8.8%. Nevertheless, the BSP said that the expansion was largely driven by robust foreign exchange inflows coming mainly from overseas remittances and business process outsourcing receipts.
The NFA of banks also increased largely because of growth in their investments in marketable debt securities and deposits with other banks.
Likewise, banks’ liabilities decreased on account of lower placements made by foreign banks in their local branches, the BSP noted.
