Domestic liquidity grows by 5.5 percent in January 2023

Preliminary data show that domestic liquidity (M3) grew by 5.5 percent year-on-year to about ₱16.0 trillion in January 2023 from the 6.7-percent (revised) growth in December 2022. On a month-on-month seasonally-adjusted basis, M3 was broadly unchanged.

Domestic claims rose by 11.3 percent year-on-year in January from 12.7 percent (revised) in the previous month as bank lending to the private sector remained brisk. Claims on the private sector grew by 10.5 percent in January from 10.8 percent (revised) in December due to the sustained expansion in bank lending to non-financial private corporations and households.

Net claims on the central government rose by 16.5  percent in January from 20.8 percent (revised) in December owing to the borrowings by the National Government.

Meanwhile, net foreign assets (NFA) in peso terms decreased by 1.0 percent year-on-year in January from the 3.5-percent decline in December.

The NFA of banks contracted mainly on account of higher bills payable. Similarly, the Bangko Sentral ng Pilipinas’ (BSP) NFA position fell marginally by 0.2 percent in January.

Looking ahead, the BSP will continue to ensure that overall domestic liquidity conditions remain consistent with the prevailing stance of monetary policy, in line with the BSP’s price and financial stability objectives.