Money supply expands to P15.3 T – BSP – Manila Bulletin

The central bank said domestic liquidity or M3 rose 9.8% year-on-year in January to 15.3 trillion pesos, more than the 7.3% growth recorded in December.

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The rise in M3, also known as money supply, was due to significant growth in bank lending in January and higher net claims on central government due to sustained borrowing by the national government (NG), according to the Bangko Sentral ng Pilipinas (BSP).

On a seasonally adjusted month-on-month basis, M3 rose 2.8%, the BSP said on Monday, February 28.

Domestic claims rose 9.6% year-on-year in January, from 7.7% in December, due to “sustained expansion in net claims on central government as well as continued improvement in bank lending to the private sector”.

The BSP said net claims on central government rose 19.6%, but this is slower growth from 22.1% in December due to NG borrowing.

“Meanwhile, claims on the private sector rose 6.1% in January, from 2.8% (revised) in December, as bank lending to private non-financial corporations accelerated while credit to households returned. to positive growth for the first time since December 2020,” the BSP noted.

At the same time, the net foreign assets of the money supply or NEA increased by 6.2% in January against 6.5% in December. “BSP’s NFA position increased during the month even as the country’s gross international reserves declined from a year ago,” the BSP said.

He added that banks’ NEA growth had “moderated” as banks’ external assets were growing at a slower pace due to lower deposits held with non-resident banks.

“Consistent with its pricing and financial stability objectives, BSP will continue to provide appropriate policy support for economic recovery, even as it considers the eventual normalization of its extraordinary liquidity measures when conditions warrant,” the statement said. the BSP.

Since March 2020, when the global pandemic was declared, the BSP has provided liquidity to ease market concerns and provide the financial system with the necessary funding it needs during the lockdown.

At the end of 2021, central bank liquidity enhancement measures amounted to 2.3 trillion pesos, or about 12.03% of gross domestic product (GDP).

BSP’s accommodative monetary policy stance, in addition to regulatory relief measures for banks and non-banks, as well as additional bank funds in the financial system, helped the economy weather four quarters of contraction of GDP.

Last year, GDP grew by 5.6%, reversing the 9.6% decline in GDP in 2020. GDP in 2021 also exceeded the government’s projection by 5% to 5.5%.


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