Philippine money supply rises 7.3% in September

Domestic liquidity in the Philippines rose by 7.3 percent year-on-year in September to reach approximately PHP 18.9 trillion, according to preliminary data from monetary authorities.

This growth in money supply, measured as M3, was faster than the 6.6-percent expansion recorded in August.

On a seasonally adjusted basis, M3 increased by 1.2 percent month-on-month in September.

M3 is a broad indicator of money supply that includes currency in circulation, bank deposits, and liquid financial assets.

The primary driver of liquidity growth was a 10.3 percent year-on-year increase in claims on the domestic sector, which includes both private and public institutions.

This marks an acceleration from the 9.8 percent growth seen in August, reflecting continued credit activity within the economy.

Claims on the private sector rose by 10.3 percent in September, although slightly lower than the 11.1 percent expansion the previous month.

This was supported by sustained bank lending to non-financial private corporations and households, indicating healthy credit demand.

Net claims on the central government increased by 10.0 percent from 6.1 percent in August, largely due to higher government borrowings.

Net foreign assets (NFA) in peso terms rose by 3.3 percent year-on-year in September, down from 4.8 percent the previous month.

The Bangko Sentral ng Pilipinas’ (BSP) NFA dipped slightly by 0.1 percent, while banks’ NFA increased due to higher holdings of foreign currency-denominated debt.

The BSP said it will continue to manage liquidity levels to ensure alignment with its objectives for price and financial stability.

The growth in domestic liquidity is an important indicator of the economy’s financial health and its ability to support investment, consumption, and overall economic activity.