M3 continues to expand


    Preliminary data show that domestic liquidity (M3) grew by 6.7 percent year-on-year to about P11.9 trillion in July 2019, slightly faster than the 6.4-percent growth in June.

    On a month-on-month seasonally-adjusted basis, M3 increased by 0.8 percent.

    Demand for credit eased slightly but remained the principal driver of money supply growth.
    Domestic claims grew by 5.7 percent in July from 6.2 percent in the previous month. This was due mainly to the sustained growth in credit to the private sector.

    Loans for production activities continued to be driven by lending to key sectors such as real estate activities; financial and insurance activities; electricity, gas, steam and airconditioning supply; construction; and wholesale and retail trade, repair of motor vehicles and motorcycles.

    Loans for household consumption increased due to the growth in motor vehicle and salary-based general purpose consumption loans during the month.

    Meanwhile, net claims on the central government contracted by 1.8 percent in July following a 3.9-percent decline in June as a result of the increase in deposits by the National Government with the BSP.

    Net foreign assets (NFA) in peso terms increased by 5.8 percent in July from 5.3 percent in June.

    The BSP’s NFA position expanded during the month, driven by foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and foreign portfolio investments.

    By contrast, the NFA of banks decreased as their foreign liabilities grew due to increased placements and deposits made by foreign banks with their local branches and other banks.