Domestic liquidity grows by 8.5%, year-on-year, in February 2022

Preliminary data show that domestic liquidity (M3) grew by 8.5 percent year-on-year to about ₱15.2 trillion in February 2022.

This is the same as the revised rate of expansion recorded in the previous month after accounting for bank data updates and post-audit adjustments. On a month-on-month seasonally-adjusted basis, M3 rose by 0.3 percent.

Domestic claims increased by 8.8 percent year-on-year in February from 8.3 percent (revised) in the previous month due to the faster expansion in net claims on the central government as well as the sustained improvement in bank lending to the private sector.

Net claims on the central government rose by 21.0 percent in February from 19.3 percent (revised) in January owing to the sustained borrowings by the National Government. Similarly, claims on the private sector increased by 4.9 percent in February from 4.3 percent (revised) in January as bank lending to non-financial private corporations rose.

Net foreign assets (NFA) in peso terms increased by 6.5 percent in February from 6.4 percent (revised) in January. The expansion in the Bangko Sentral ng Pilipinas’s (BSP) NFA position reflected the increase in the country’s level of gross international reserves relative to the same period a year ago.

Likewise, the NFA of banks increased as banks’ foreign assets grew at a faster pace on account of higher interbank loans receivable and deposits maintained with nonresident banks.

Going forward, the BSP will ensure that domestic liquidity and credit conditions remain appropriate in sustaining the momentum of domestic economic recovery, to the extent provided by the outlook on inflation and growth.