M3 expansion slows, still supportive of growth

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Domestic liquidity expanded by 8.5 percent in September, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, slightly losing pace but still “sufficient to support economic growth”.

Preliminary data released by the central bank showed M3 at P7.829 trillion last month, up from P7.790 trillion in August when growth hit 9 percent. Month-on-month and seasonally adjusted, M3 growth was 0.1 percent.

“The continued expansion of money supply during the month indicates that money supply remains sufficient to support economic growth,” the central bank said in a statement.

“Going forward, the BSP will continue to monitor monetary conditions closely to ensure that liquidity in the financial system remains consistent with … price and financial stability objectives,” it added.


Domestic claims grew by 12.4 percent in September, down from the 13 percent posted in August.

The bulk of the bank loans went into real estate; electricity, gas, steam and air-conditioning supply; wholesale and retail trade and repair of motor vehicles and motorcycles; and financial and insurance activities.

Lending to the public sector, meanwhile, rose by 15.4 percent, faster than the revised 14.5 percent increase in the preceding month.

Net foreign assets (NFA) in peso terms grew by 6.9 percent in September from August’s revised 7.9 percent, the BSP said.

It added that the central bank’s NFA position continued to expand due to robust foreign exchange inflows, coming mainly from overseas Filipinos’ remittances and business process outsourcing receipts.

The NFA of banks, meanwhile, also increased as their foreign assets grew faster compared to their foreign liabilities. The foreign assets increased due largely to growth in investments in marketable debt securities, while foreign liabilities grew mainly on account of higher deposits and placements made by foreign banks with other banks, the BSP said.

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