Money supply expands 12.6% to P9.43T in Feb
Lawrence Agcaoili (The Philippine Star) - April 1, 2017 - 12:00am

MANILA, Philippines -  The Bangko Sentral ng Pilipinas (BSP) yesterday said the expansion of money circulating in the financial system picked up in February amid the sustained economic growth.

BSP Governor Amando Tetangco Jr. said money supply or liquidity (M3) picked up to 12.6 percent in February, faster than the revised 12.3 percent expansion booked in January.

Latest data from the central bank showed domestic liquidity amounted to P9.43 trillion in end-February, P1.05 trillion higher than the P8.38 trillion recorded in end-February 2016.

Monetary authorities continued to siphon off excess liquidity in the financial system through various tools introduced during the launching of the interest rate corridor (IRC) framework last June 3.

The BSP has retained the volume of the term deposit facility (TDF) at P180 billion consisting of P150 billion worth of 28-day term deposits and P30 billion worth of seven-day term deposits.

Tetangco said the growth in M3 remains consistent with the BSP’s prevailing outlook for inflation and economic activity.

“Going forward, the BSP will continue to monitor monetary conditions closely to ensure that monetary conditions are conducive to maintaining price and financial stability,” he said.

The BSP chief said demand for credit remains the principal driver of liquidity growth in the financial system.

The BSP has set an inflation target of between two and four percent between 2017 and 2020. The central bank’s Monetary Board has lowered its inflation forecasts to 3.4 percent from the original target of 3.5 percent for this year and to three instead of 3.1 percent for 2018.

The BSP adopted the IRC framework in June last year as it implemented an operational adjustment in key policy rates to enhance the effectiveness of monetary policy.

 

AMANDO TETANGCO JR
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