Steady credit demand boosts liquidity by 9.2%


Domestic liquidity expanded by 9.2 percent in November, the Bangko Sentral ng Pilipinas reported on Tuesday, following sustained demand for credit.

Preliminary data placed M3 at P8 trillion in November, up from P7.887 trillion in October when growth hit a revised 9.2 percent. Month-on-month and seasonally adjusted, M3 growth decreased by 0.3 percent.

“Money supply continued to expand due largely to sustained demand for credit,” the central bank said in a statement, adding that the liquidity level was sufficient to support economic growth.

“Going forward, the BSP will continue to monitor liquidity dynamics to ensure that monetary conditions remain in line with price and financial stability,” it added.

Domestic claims grew by 11.6 percent, up from the revised 11.3 percent posted in October.

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

Lending to the public sector rose by 10.5 percent, slower than the revised 11.6 percent increase in the preceding month.

Net foreign assets (NFA) in peso terms grew by 9 percent from October’s revised 8.2 percent, the central bank said, adding that its own 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 foreign liabilities. Foreign assets grew primarily because of investments in marketable debt securities, while foreign liabilities were boosted by increased deposits and placements by foreign banks.


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