Domestic liquidity (M3) grew by 34.8 percent year-on-year at
Money supply continued to expand due to the sustained demand for credit in the domestic economy. Domestic claims rose by 12.4 percent in March as bank lending accelerated further, with the bulk going to real estate, renting, and business services, utilities, wholesale and retail trade, manufacturing, as well as financial services. Meanwhile, public sector credit grew at a slower pace of 3.5 percent as the deposits of the National Government (NG) increased, reflecting in part the proceeds from the auction of government securities as well as revenue collections from various agencies.
Net foreign assets (NFA) in peso terms also increased by 9.6 percent partly on account of the higher valuation of foreign assets due to the depreciation of the peso relative to year-ago levels. In addition, the NFA of banks increased as banks foreign assets expanded at a faster pace relative to the growth in their foreign liabilities. Banks foreign assets expanded due mainly to the growth in foreign loans and receivables as well as in their investments in marketable debt securities. Meanwhile, banks foreign liabilities rose on account of higher deposits of foreign residents and placements made by foreign banks with their local branches and other banks. Similarly, the BSP s NFA position rose on the back of continued robust foreign exchange inflows coming mostly from overseas Filipinos remittances and business process outsourcing receipts.
As in previous months, the strong M3 growth reading in March continues to reflect the broad decline in the SDA placements of trust entities compared to their levels a year ago, in line with the BSP s operational adjustments in the SDA facility.
The growth in domestic liquidity remains consistent with the current pace of expansion in the real sector. Going forward, the BSP will continue to assess liquidity conditions closely as it guards against potential risks to price and financial stability that could arise from strong liquidity growth.
Most Popular Stories
- Shia LaBeouf Plea Deal, Alcoholism Treatment
- Ohio State Band Chief Fired After Probe
- Stop-Start Engines Save Gas, Reduce Emissions
- Hispanic Leader Goes the Extra Mile
- Ukraine Says Russians Firing Across the Border
- Ford Q2 Net Profit up 6 Percent
- U.S. Weighs Refugee Status for Immigrant Kids
- Jennifer Lopez, Pitbull to Perform at Fashion Rocks
- Morgan Stanley Ponies Up $275 Million to Settle SEC Charges
- Ricky Martin Joins 'The Voice ... Mexico'