Domestic liquidity grows by 6.9 Percent, year-on-year, in May

Preliminary data show that domestic liquidity (M3) grew by 6.9 percent year-on-year to about ₱15.3 trillion in May after expanding by 7.2 percent (revised) in April.

On a month-on-month seasonally-adjusted basis, M3 was broadly unchanged.

Domestic claims rose by 8.9 percent year-on-year in May from 9.1 percent (revised) in the previous month due to the improvement in bank lending to the private sector.

Claims on the private sector grew by 7.5 percent in May from 6.5 percent in April with increased bank lending to non-financial private corporations and households.

Meanwhile, net claims on the central government rose by 15.3 percent in May from 18.3 percent (revised) in April owing to the sustained borrowings by the National Government.

Net foreign assets (NFA) in peso terms increased by 3.4 percent in May from 5.2 percent in April.

The slower expansion in the BSP’s NFA position reflected the decline in gross international reserves relative to the same period a year ago. Meanwhile, the NFA of banks continued to expand, albeit at a slower pace, on account of higher investments in marketable debt securities.

Domestic liquidity dynamics remain broadly in line with the Bangko Sentral ng Pilipinas’ (BSP) prevailing outlook for inflation and economic activity. Looking ahead, the BSP will continue to ensure that overall monetary conditions are conducive to maintaining price and financial stability.