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DEMAND for money grew at a faster pace last March due to an increase
in net foreign assets, according to the Bangko Sentral ng Pilipinas
(BSP).
In a statement, the BSP said domestic liquidity
or M3 rose 9.6 percent from March last year, accelerating from the
6.6-percent increase seen in the previous month.
“The expansion in domestic liquidity continued
to be driven by the increase in [net foreign assets], particularly
those of the BSP, as banks registered a reduction in their [net
foreign assets],” the central bank said.
It, however, said the growth in the country’s
money supply was tempered by the decline in net domestic assets,
which contracted 1.4 percent in March. Liquidity had shrunk a faster
3.3 percent in the previous month.
The growth of credit extended to the public
sector remained strong at 10.3 percent, although slightly lower than
the 11.5 percent reported in the previous month. The national
government’s borrowings drove up the public sector’s credit
demand, rising 15 percent year-on-year, as the Arroyo administration
raised fresh funds to support its increased spending tack in light
of a slowdown in the country’s biggest export market and rising
fuel and food prices.
Credit extended to the private sector registered
a slower growth of 2.6 percent from the 10.1 percent posted
previously.
Liquidity growth is an important indicator that
the BSP closely monitors to ensure that monetary conditions are
consistent with the goal of promoting price stability while
supporting economic growth.
The amount of money in the local financial
system stood at P3.213 trillion in March from P2.932 trillion in the
same month last year. M3 consists of peso savings, time deposits, or
quasi-money and deposit substitutes.
Overseas Filipino workers’ (OFW) remittances
remain a stable source of foreign exchange inflows.
Money sent home by OFWs grew by 9.4 percent in
March to $1.4 billion, causing remittances in the first quarter to
increase 13.2 percent to $4 billion from the same period last year.
-- Chino S. Leyco
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