Domestic liquidity up 9.2% to P8T in November

MANILA, Philippines - Liquidity in the financial system continued to pick up in November amid the country’s accelerating economic growth, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Money supply grew 9.2 percent to P8 trillion in end-November last year from P7.33 trillion in end-November 2014, the BSP said.

BSP Governor Amando Tetangco Jr. said the growth in money supply in November was unchanged from the revised 9.2 percent expansion recorded in October.

“Money supply continued to expand due largely to sustained demand for credit,” Tetangco said.

Tetangco said domestic claims grew 11.6 percent in November from the revised 11.3 percent in October.

“Credits to the private sector increased at a broadly steady pace relative to the previous month,” he said.

The BSP chief said the bulk of bank loans in November was channeled to key production sectors such as real estate activities; electricity, gas, steam and airconditioning supply; wholesale and retail trade, and repair of motor vehicles and motorcycles; financial and insurance activities; and construction.

According to Tetangco, net public sector credit rose 10.5 percent in November, slower than the revised 11.6 percent growth registered in October.

Net foreign assets (NFA) in peso terms grew nine percent in November from 8.2 percent in October as the BSP’s NFA position continued to expand during the month on the back of robust foreign exchange inflows coming mainly from overseas Filipinos’ remittances and business process outsourcing receipts.

Likewise, the NFA of banks increased as banks’ foreign assets expanded at a faster pace relative to that of their foreign liabilities.

“Banks’ foreign assets increased due largely to the growth in their investments in marketable debt securities, while banks’ foreign liabilities grew mainly on account of higher deposits and placements made by foreign banks with other banks,” Tetangco said.

Tetangco said the sustained expansion of M3 last November indicates that money supply remains sufficient to support economic growth.