The country’s domestic liquidity expanded at a faster pace in March, with money supply reaching P20.4 trillion as stronger lending activity by businesses and households continued to fuel economic activity, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The BSP reported that domestic liquidity, or M3, grew by 12 percent year-on-year in March, accelerating from the revised 10.3-percent growth recorded in February.
On a seasonally adjusted month-on-month basis, money supply also increased by 1.7 percent.
M3, considered the broadest measure of money circulating in the economy, includes cash in circulation, bank deposits, and other liquid financial instruments that can easily be converted into cash.
The central bank attributed the faster liquidity growth mainly to sustained expansion in private sector borrowing.
Claims on the private sector, which largely consist of loans extended to non-financial corporations and households, rose by 11.8 percent in March, higher than the 10.6-percent growth logged a month earlier.
Meanwhile, net claims on the national government increased by 12.1 percent, driven primarily by higher issuances of government securities.
The BSP also reported that net foreign assets (NFAs) in peso terms climbed by 8.6 percent in March from the revised 7.5-percent growth in February.
NFAs refer to the difference between the foreign assets and liabilities of depository corporations.
According to the central bank, the BSP’s own NFA position expanded by 4.9 percent, while banks also posted higher NFA levels due largely to lower foreign currency-denominated bills.
The narrower liquidity measure known as M1, which covers physical currency and current account deposits, likewise posted faster growth at 9.4 percent in March from 8.5 percent in February.
Despite the continued rise in domestic liquidity, the BSP said it remains committed to ensuring that money supply conditions stay aligned with its objectives of maintaining price stability and safeguarding the financial system.