Domestic liquidity expanded at a faster pace in October, rising by 8.3 percent year-on-year to about P19.1 trillion, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP).
The latest growth rate exceeded the revised 7.6 percent increase recorded in September. Seasonally adjusted data also showed that M3 — the broadest measure of money supply — grew by 1.0 percent month-on-month.
M3 includes currency in circulation, bank deposits, and other liquid financial instruments that can be readily converted to cash.
The BSP said Thursday night that money supply growth was supported by the continued expansion in domestic claims, which rose by 10.5 percent in October, slightly lower than the revised 10.6 percent increase in September. Domestic claims reflect the liabilities of both private and government entities to the banking system.
Claims on the private sector increased by 11.0 percent, up from the previous month’s revised 10.7 percent, driven by sustained lending to non-financial private firms and households.
Net claims on the national government also expanded by 10.0 percent, mainly due to higher borrowings.
Meanwhile, net foreign assets (NFAs) in peso terms rose by 2.1 percent year-on-year in October, though this was slower than the 3.3 percent growth recorded in September. NFAs of the BSP edged down by 0.4 percent, while those of banks increased due to lower foreign currency–denominated bills payable.
The BSP said it will continue to ensure that liquidity conditions remain consistent with its goals of maintaining price stability and safeguarding the financial system.
PIXABAY PHOTO