Metro Manila (CNN Philippines) — According to figures from the Bangko Sentral ng Pilipinas (BSP), domestic liquidity (M3) — the total amount of currency and cash-equivalent securities circulating in the Philippine economy — grew to P7.7 trillion in June, from May’s P7.6 trillion. The amount accounts for a 9.0% year-on-year growth — slightly slower than the previous month’s 9.3%.
On a month-on-month seasonally-adjusted basis, the BSP remarked the M3 grew by 0.3%.
The growth was buoyed by a sustained demand for credit — domestic claims grew 10.8% during the month, from May’s revised 9.7%. The BSP said that Credits to the private sector increased a faster pace relative to the previous month.
The majority of bank loans went to production sectors such as real estate activities, electricity, gas, steam, and air conditioning supplies; and financial and insurance activities.
Likewise, net public sector credit also rose by 1.6%, after contracting by 3.4% a month earlier.
Net foreign assets grew by 8.0% during the month, on the back of what the BSP said were robust foreign exchange inflows mainly from remittances of overseas Filipinos, and business process outsourcing receipts. The figure is slightly lower than the 8.3% expansion recorded last month.
Similarly, banks saw their foreign assets expand due largely to growth in their investments in marketable debt securities and deposits with other banks. Their foreign liabilities contracted on account of lower deposit and placements made by foreign banks with their local branches.
“The continued expansion in domestic liquidity during the month indicates that liquidity remains sufficient to sustain the economy’s growth requirements,” the BSP said.
“Going forward, the BSP will closely monitor monetary conditions to ensure that liquidity dynamics stay consistent with the BSP’s price and financial stability objectives.”
