Growth in the country’s money supply in November slipped to a year-on-year rate of 9 percent from the previous month’s annual expansion of 15.4 percent , an effect of the central bank’s mopping up operations started last year.
Data from the Bangko Sentral ng Pilipinas (BSP) showed on Monday that domestic liquidity or M3—which measures the total amount of cash and cash-equivalent of securities circulating within the economy—reached P7.3 trillion in November.
The seasonally adjusted M3 in November also contracted by 1.2 percent on a month-to-month basis.
The M3 indicator has been on a declining growth trend since January this year when it stood at a high of 37.3 percent. The exception was only from July to August, when M3 growth showed a slight acceleration from 17.9 percent to 18.3 percent.
The central bank said the deceleration in M3 growth during the month could be attributed in part to the increase in placements of trust entities in the BSP’S special deposit account (SDA) facility relative to a year ago.
“The slower M3 growth in November 2014 also reflects statistical base effects associated with the significant increase in domestic liquidity a year ago of 34.3 percent following the operational adjustments involving access of trust entities to the BSP SDA facility, which were completed in November 2013,” it stated.
Demand for credit up
On the other hand, the BSP said money supply’s expansion was due largely to the sustained demand for credit.
Domestic claims in November rose 17.6 percent from 18.2 percent in October, reflecting in part the continued expansion in credit to the private sector, the BSP said.