PHL liquidity growth accelerates to 8.6% in January

Domestic liquidity, or the amount of money circulating in the economy, rose 8.6 percent year on year to PHP 19.7 trillion in January, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on March 9.

The January pace was faster than the revised 7.2 percent expansion recorded in December.

After adjusting for seasonal factors, broad money, or M3, increased 0.8 percent month on month in January.

M3 is a broad measure of money supply that includes currency in circulation, bank deposits, and other financial assets that can be converted into cash relatively easily.

The BSP’s data showed that claims on the domestic sector, which include private and government entities in the country, rose 10.0 percent year on year in January, slower than the revised 10.5 percent growth in December.

Claims on the private sector alone grew 10.6 percent in January, slightly below the revised 10.7 percent increase in the previous month, as bank lending to non-financial private corporations and households continued to expand.

Net claims on the central government increased 8.9 percent in January, easing from 10.8 percent in December, with the BSP attributing the rise mainly to higher government borrowings.

Net foreign assets in peso terms climbed 10.2 percent year on year in January, faster than the revised 5.9 percent growth in December.

The BSP said its own net foreign assets rose 9.2 percent, while banks’ net foreign assets increased primarily because of lower foreign currency-denominated bills payable.

Money supply is closely watched because it reflects how much cash and near-cash is circulating through the economy, which can influence credit conditions, business activity, household spending, and inflation pressures.

In level terms, the BSP’s accompanying Depository Corporations Survey showed net foreign assets at PHP 7,545,396 million in January, up from PHP 7,358,486 million in December 2025 and PHP 6,844,121 million in January 2025.

The BSP’s own net foreign assets stood at PHP 6,622,533 million in January, compared with PHP 6,503,038 million in December and PHP 6,062,743 million a year earlier.

The central bank’s claims on nonresidents reached PHP 6,876,080 million in January, while its liabilities to nonresidents stood at PHP 253,548 million.

Other depository corporations posted net foreign assets of PHP 922,863 million in January, with claims on nonresidents at PHP 2,092,944 million and liabilities to nonresidents at PHP 1,170,080 million.

Domestic claims reached PHP 22,297,396 million in January, against PHP 22,677,525 million in December and PHP 20,275,177 million a year earlier.

Net claims on the central government stood at PHP 5,888,265 million in January, derived from claims on the central government of PHP 7,506,683 million and liabilities to the central government of PHP 1,618,419 million.

Claims on other sectors totaled PHP 16,409,131 million in January.

That figure included PHP 1,425,645 million in claims on other financial corporations, PHP 250,679 million in claims on state and local government, PHP 266,849 million in claims on public non-financial corporations, and PHP 14,465,958 million in claims on the private sector.

The broader liquidity aggregates showed M4 at PHP 23,241,518 million, M3 at PHP 19,710,862 million, M2 at PHP 19,277,403 million, and M1 at PHP 7,579,536 million in January.

Currency outside depository corporations stood at PHP 2,368,033 million, while transferable deposits included in broad money reached PHP 5,211,502 million.

Other deposits included in broad money amounted to PHP 11,697,867 million.

Within that category, savings deposits stood at PHP 7,302,777 million, and time deposits reached PHP 4,395,090 million.

Securities other than shares included in broad money were recorded at PHP 433,460 million in January.

Transferable and other deposits in foreign currency held by residents reached PHP 3,530,656 million.

Liabilities excluded from broad money stood at PHP 6,601,273 million in January.

The BSP also noted that M3 can be derived from net foreign assets plus domestic claims, minus residents’ foreign currency deposits and liabilities excluded from broad money.

In its statement, the central bank said it would continue to ensure that domestic liquidity conditions remain consistent with its price and financial stability objectives.