|
By Maricel E. Burgonio, Reporter
The Bangko Sentral ng Pilipinas said growth of
domestic liquidity (M3) or the demand of money is likely to slow
down next year.
BSP Governor Amando M. Tetangco Jr., has placed
next year’s M3 growth “in the area of 15 percent” based on
preliminary data.
The BSP based the M3 growth assumption on its
projection that economic growth next year would reach 7 percent.
In the first nine months, the economy, as
measured by the country’s gross domestic product, grew 7.1
percent, the highest in more than two decades.
However, the Development Budget Coordination
Committee estimated the economy to grow at a slower pace—between
6.3 percent and 7 percent or 6.2 percent and 6.8 percent—because
of costlier crude and a stronger peso, which dampen exports growth.
The level of liquidity should be consistent with
inflation target and economic growth, Tetangco said.
M3 grew by 11.4 percent year on year to
P2.9 trillion in October 2007, maintaining the same growth momentum
as in the previous month. It posted a high of 26.3 percent year on
year in April from the 24.6-percent increase registered in March
this year.
M3 is the sum of money supply, peso savings and
time deposits or quasi money, and deposit substitutes of deposit
money banks.
The economic growth is driven mainly by strong
remittance flows, but Tetangco said investments are increasing to
make significant contribution to GDP growth in line with
government’s infrastructure development program.
BSP projects foreign direct investments to reach
$3.6 billion next year, higher than the estimated -$1.2 billion this
year.
The benign inflation environment is expected to
continue over the policy horizon until 2009, supported by manageable
liquidity growth, the firm peso, moderating risks pertaining to
agricultural output, moderate wage adjustments, and well-anchored
inflation expectations.
|
