BSP PR
Preliminary data show that domestic liquidity (M3) grew by 12.3 percent year-on-year to about ₱13.5 trillion in September. This was slower than the 13.7-percent (revised) expansion in August. On a month-on-month seasonally-adjusted basis, M3 increased by 0.2 percent.
Domestic claims rose by 8.2 percent year-on-year in September from 10.0 percent (revised) in August. Claims on the private sector, driven mainly by bank lending to non-financial private corporations and households, grew at a weaker pace due to constrained economic activity and weak corporate sector performance. Loans for production activities across most sectors decelerated, while loans to key sectors such as manufacturing and wholesale and retail trade and repair of motor vehicles and motorcycles continued to decline. Growth in loans to households likewise eased due to the continued slowdown in credit card and motor vehicle loans during the month. Net borrowings by the central government increased by 45.7 percent in September from 50.0 percent (revised) in the previous month due partly to the government’s lower funding requirement during the month.
Meanwhile, net foreign assets (NFA) in peso terms expanded by 20.6 percent year-on-year in September, faster than the 18.0-percent (revised) growth in August. The expansion in the BSP’s NFA position reflected the increase in gross international reserves. Similarly, the growth in the NFA of banks accelerated, as banks’ foreign liabilities declined on account of lower bills and bonds payables.
Going forward, the BSP remains prepared to calibrate its monetary instruments as needed to ensure adequate domestic liquidity and credit in support of economic activity amid the COVID-19 pandemic.
