MANILA, July 31 (PNA) — Preliminary data show that domestic liquidity (M3) grew by 9.0 percent year-on-year in June 2015 to reach Php7.7 trillion. This was slightly slower than the 9.3-percent expansion recorded in May. On a month-on-month seasonally-adjusted basis, M3 decreased by 0.3 percent.
Money supply continued to expand due largely to sustained demand for credit. Domestic claims grew by 10.8 percent in June from 9.7 percent in May (revised) as credits to the private sector increased at a faster 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; manufacturing; and financial and insurance activities. Meanwhile, net public sector credit rose by 1.6 percent in June after contracting by 3.4 percent (revised) a month earlier.
Net foreign assets (NFA) in peso terms grew at a slightly slower pace of 8.0 percent in June from 8.3 percent in the previous month.
The BSP’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, while their foreign liabilities contracted.
Banks’ foreign assets increased due largely to the growth in their investments in marketable debt securities and deposits with other banks, while banks’ foreign liabilities decreased on account of lower deposits and placements made by foreign banks with their local branches.
The sustained expansion in domestic liquidity during the month indicates that liquidity remains sufficient to support the economy’s growth requirements.
Going forward, the BSP will continue to keep a close eye on monetary dynamics to ensure that liquidity in the financial system remains consistent with maintaining price and financial stability. (PNA)