DOMESTIC liquidity, or the money supply in the financial system, grew 9.2 percent in November year-on-year to reach P8 trillion on the back of sustained demand for credit in the economy, Bangko Sentral ng Pilipinas said Tuesday.
The expansion, however, was unchanged from the revised 9.2-percent growth recorded in October. M3 decreased 0.3 percent on a month-on-month seasonally-adjusted basis.
“The sustained expansion of M3 during the month indicates that money supply remains sufficient to support economic growth. Going forward, the BSP will continue to monitor domestic liquidity dynamics to ensure that monetary conditions remain in line with price and financial stability,” Bangko Sentral said in a statement.
Domestic claims rose 11.6 percent in November from the revised 11.3 percent
growth in October. Credits to the private sector increased at a broadly steady pace relative to the previous month.
The bulk of bank loans during the month was channeled to key production sectors such as real estate activities; electricity, gas, steam and air-conditioning supply; wholesale and retail trade, and repair of motor vehicles and motorcycles; financial and insurance activities; and construction.
Meanwhile, net public sector credit rose 10.5 percent in November,
slower than the revised 11.6-percent growth a month earlier.
Net foreign assets in peso terms grew 9.0 percent in November from 8.2 percent in the previous month. Bangko Sentral’s NFA position continued to expand during the month on the back of robust foreign exchange inflows coming mainly from overseas Filipinos’ remittances and business process outsourcing receipts.
“The NFA of banks likewise increased as banks’ foreign assets expanded at a faster pace relative to that of their foreign liabilities. Banks’ foreign assets increased due largely to the growth in their investments in marketable debt securities, while banks’ foreign liabilities grew mainly on account of higher deposits and placements made by foreign banks with other banks,” it said.
Outstanding loans of commercial banks, net of reverse repurchase placements with the BSP, increased 13.6 percent in November from 13.9 percent in October.
Similarly, bank lending inclusive of RRPs increased 13.2 percent in November from 13.6 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased 0.9 percent for loans net of RRPs and by 0.7 percent for loans inclusive of RRPs.
Loans for production activities—which comprised more than 80.0 percent of banks’ aggregate loan portfolio—grew by 14.1 percent in November from 14.4 percent in October.
The expansion in production loans was driven primarily by increased lending to real estate activities (21.8 percent); electricity, gas, steam and air-conditioning supply (27.8 percent); wholesale and retail btrade, repair of motor vehicles and motorcycles (13.9 percent); financial and insurance activities (15.2 percent); and construction (29.7 percent).