Domestic liquidity growth slows down in February: BSP

March 29, 2019

Preliminary data showed domestic liquidity (M3) grew by 7.1 percent year-on-year to about ₱11.5 trillion in February, the Bangko Sentral ng Pilipinas ( BSP) said Friday.

This was slower than the revised 7.7-percent expansion in January.

On a month-on-month seasonally-adjusted basis, M3 increased by 0.8 percent.

Demand for credit eased but remained the principal driver of money supply growth.

Domestic claims grew by 11.7 percent in February from a revised 12.4 percent in the previous month due mainly to sustained growth in credit to the private sector.

Loans for production activities continued to be driven by lending to key sectors such as real estate activities; wholesale and retail trade, repair of motor vehicles and motorcycles; financial and insurance activities; manufacturing; construction; and electricity, gas, steam and air conditioning supply.

The growth of loans for household consumption was higher in February amid the acceleration in credit card loans, sustained growth in motor vehicle loans, and expansion of salary-based general purpose consumption loans and other types of household loans during the month.

Growth in net claims on the central government likewise increased to 8.3 percent in February from 5.3 percent in the previous month. Meanwhile, net foreign assets (NFA) in peso terms contracted by 1.5 percent year-on-year in February after declining by 1.2 percent in the previous month.

The NFA of banks decreased anew even as banks’ foreign assets rose as a result of higher loans and investments in marketable debt securities.

By contrast, the BSP’s NFA position continued to expand in February, supported by foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and foreign portfolio investments. DMS