April M3 money supply rises 9%

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DOMESTIC liquidity in April as measured by M3—the total amount of cash and cash-equivalents circulating within the economy—rose 9 percent year-on-year to P7.6 trillion despite a cooling of demand for credit, the central bank said on Friday.

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Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the M3 growth in April was faster than the revised 8.7-percent growth posted in March.

Month-on-month and on a seasonally adjusted basis, M3 expanded by 0.9 percent, the central bank said.

The BSP said money supply continued to increase on the back of sustained demand for credit although domestic claims in April slowed slightly from a month ago.

Domestic claims grew by 9.3 percent in April from 10.4 percent in March as credits to the private sector expanded at a slightly slower pace relative to the previous month, the BSP said.

The bulk of the bank loans during the month were channeled into key production sectors such as manufacturing, real estate, renting, and business services, wholesale and retail trade, utilities, and financial intermediation.

In contrast, the BSP data showed lending for the public sector contracted by 7.9 percent after declining by a revised 8.3 percent in March.

The central bank said the domestic liquidity growth accelerated during the month due in part to the decline in the placements of trust entities in the BSP’s special deposit account (SDA) facility relative to the previous month.

“Nonetheless, the broadly slower pace of M3 expansion in April 2015 relative to a year ago reflects the gradual normalization of domestic liquidity growth after the operational adjustments involving access of trust entities to the BSP’s SDA facility were completed in November 2013,” the BSP concluded.

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