Domestic liquidity grew by 7.6 percent year-on-year to P19.4 trillion in November, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP), reflecting continued expansion in money supply even as growth eased from the previous month.
Also known as M3, domestic liquidity increased at a slower pace than October’s 8.3 percent rise, pointing to moderating monetary conditions amid still-active economic financing.
On a seasonally adjusted basis, M3 rose by 1.2 percent month-on-month in November, indicating steady liquidity inflows toward year-end.
M3 is a broad measure of money circulating in the economy, encompassing currency in circulation, bank deposits, and other financial assets that can be readily converted to cash. Its expansion was largely supported by higher claims on the domestic sector, which climbed by 10.6 percent in November, slightly faster than October’s 10.5 percent growth.
Claims represent the liabilities of various sectors—both public and private—to banks and the central bank.
Claims on the private sector alone grew by 11.1 percent, inching up from 11.0 percent in the previous month, driven by the continued expansion in bank lending to non-financial corporations and households.
This suggests that credit demand remains resilient despite elevated borrowing costs, as firms continue to fund operations and households sustain consumption.
Net claims on the central government rose by 11.0 percent from 10.0 percent, reflecting higher government borrowings that also contributed to liquidity growth.
At the same time, net foreign assets (NFAs) in peso terms increased by 4.4 percent year-on-year, accelerating from 2.1 percent, helped by higher NFAs of both the BSP and banks.
This improvement points to relatively firmer external positions and reduced foreign currency obligations, particularly among banks.
Overall, the slower pace of M3 growth indicates that monetary conditions are gradually tightening, consistent with the BSP’s policy stance, even as liquidity remains ample enough to support economic activity.
The BSP said it will continue to ensure that domestic liquidity conditions stay aligned with its price stability and financial stability objectives.
