Manila: Growth in money circulating in the domestic economy accelerated to 12 percent in March, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Monday night. The BSP reported that domestic liquidity (M3), which includes the total money supply in banks, currency in circulation, and financial assets easily convertible to cash, reached PHP20.4 trillion during the month.
According to Philippines News Agency, the annual increase in M3 was attributed to the 'continued expansion in borrowings by non-financial private corporations and households.' Borrowings by non-financial private firms and households grew by 11.9 percent, surpassing the 10.6 percent recorded in February. Additionally, net claims on the national government rose by 12.1 percent, driven largely by the issuance of government securities.
Net foreign assets (NFAs) saw an increase of 8.6 percent during the period, a rise from February's 7.5 percent growth. The central bank's own NFA also experienced an increase of 4.9 percent during the month. Bank lending demonstrated faster growth in March, expanding by 10.7 percent year-on-year compared to 9.6 percent in the previous month, providing support for business production activities and household consumption.
Loans extended for business activities saw an increase of 9.7 percent in March, up from 8.6 percent in February. A substantial portion of these loans was directed to the electricity, gas, steam, and air-conditioning supply sector, which grew by 26.7 percent. Other sectors, such as transportation and storage, wholesale and retail trade, and real estate activities, also showed notable growth.
Consumer loans, however, posted a slower increase of 20.5 percent compared to 20.8 percent in the previous month, attributed to a slowdown in motor vehicle loans and salary-based general-purpose consumption loans. The BSP emphasized its commitment to monitoring bank lending activities, highlighting their importance as a key transmission channel of monetary policy. The central bank vowed to ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives.
