RP June '09 M3 growth declines to 12.6%
August 7, 2009 10:19 am
MANILA, Aug. 7 –- Growth of domestic liquidity or M3 in the Philippines remained at double digit in June although it decelerated to 12.6 percent from the previous month's 15 percent.
Bangko Sentral ng Pilipinas (BSP) Officer-in-Charge Nestor Espenilla, Jr. on Friday said monthly growth of M3 also slowed during the same period to 0.3 percent from last May's 1.1 percent.
He said growth of net foreign assets (NFA) remained the main reason for the rise in M3 but noted that it slowed to 17.6 percent from the previous month's 19.8 percent.
"The slight slowdown in the growth of NFA followed the slower build-up in the BSP's international reserves even as banks' foreign liabilities continued to decline," he said.
Relatively, expansion in net domestic assets (NDA) dropped to 3.2 percent from last May's 8.4 percent after net domestic credit grew 15.2 percent last May from the previous month's 18.3 percent.
Lending to the private sector remained robust although slower at 15.1 percent from the previous month's 18 percent.
Loans extended to the public sector also went down after it grew by 15.2 percent in the fifth month this year from the previous month's 18.7 percent "as the pace of credit expansion to the National Government and to local government units and other public entities slowed down," Espenilla said.
NG lending grew by 16.2 percent last May from the previous month's 18.7 percent while lending to the LGUs expanded by 11.8 percent from 18.5 percent during the same period.
Espenilla said they are monitoring M3 growth since it is among the important variables in determining the central bank's policy stance.
"The continued strong growth of money supply indicates that the liquidity-enhancing measures earlier implemented by the BSP have continued to work their way through the banking system to ensure ample funding for the requirements of the economy," he added. (PNA)
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