Domestic liquidity up by 7.3% in April

Preliminary data show that domestic liquidity (M3) grew by 7.3 percent year-on-year to about ₱15.3 trillion in April after expanding by 7.7 percent (revised) in March.

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

Domestic claims rose by 9.0 percent year-on-year in April from 8.1 percent (revised) in the previous month due to the improvement in bank lending to the private sector and the expansion in net claims on the central government.

Claims on the private sector grew by 6.5 percent in April from 5.6 percent in March with increased bank lending to non-financial private corporations and households.

Meanwhile, net claims on the central government rose by 17.6 percent in April from 16.3 percent (revised) in March owing to the sustained borrowings by the National Government.

Net foreign assets (NFA) in peso terms increased by 5.2 percent in April from 8.2 percent (revised) in March.

The slower expansion in the Bangko Sentral ng Pilipinas’ (BSP) 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 as well as loans and receivables with nonresident banks.

The continued expansion in domestic liquidity indicates that liquidity remains sufficient to sustain the economy on a firm recovery path.

A strong rebound in economic activity has also allowed the BSP to gradually withdraw its extraordinary liquidity intervention.

Going forward, the BSP stands ready to undertake further measures as necessary to ensure that liquidity conditions stay in line with the BSP’s price and financial stability objectives.