RP M3 growth remains double digit at 11.6% in end-Sept '09

MANILA, Nov. 10 – Year-on-year growth of domestic liquidity (M3) in the Philippines remained in double digit at 11.6 percent at end September this year, the Bangko Sentral ng Pilipinas (BSP) reported Tuesday.

This is, however, slower than the previous month’s 13.4 percent, BSP Governor Amando Tetangco Jr. said.

Month-on-month, the growth also slowed to 1.2 percent from last August’s 2.6 percent.

Tetangco said M3 remained strong due to the growth in net foreign assets (NFA), although it slowed to 24.1 percent last September from the previous month’s 29.9 percent.

“The slowdown in the growth of NFA followed the slower increase in the foreign assets of the BSP and other depository corporations,” he said.

On the other hand, net domestic assets (NDA) posted a negative growth of 0.2 percent last September but is better than the previous month’s 2.8-percent contraction.

“(This was) due partly to the improvement in the net other items account relative to the previous month,” the central bank said.

BSP data shows that contraction in the Net Other Items totaled to nearly P1.38 trillion last September from the previous month’s almost P1.49 trillion.

It shows that net domestic credit grew by 8.8 percent last September from the previous month’s 11.1 percent.

Similarly, growth of lending to the private sector slowed to 10.8 percent last September from month-ago’s 21.8 percent “reflecting a slower expansion of credit extended to the national government.”

BSP said lending to NG grew by 13.1 percent last September from month-ago’s 29.1 percent.

Growth of lending to the public sector was contrary to the expansion in private sector lending, which stood at 7.9 percent from last August’s 6.2 percent.

“The double-digit growth of domestic liquidity was due in part to resilient foreign exchange inflows, indicating that funds in the banking system remain adequate to support economic activity,” Tetangco added. (PNA) LDV/JS

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