Money in Circulation Hits ₱20.1 Trillion

Domestic liquidity, or the amount of money circulating in the economy, grew by 7.0 percent year on year to ₱20.1 trillion in December, preliminary data show.

The BSP will continue to ensure that domestic liquidity conditions remain consistent with its price and financial stability objectives.

Growth of domestic liquidity, also known as M3, was slower in December than the 7.6 percent increase in November.

After adjusting for seasonal fluctuations, M3 remained broadly stable from November. M3 is a broad measure of money supply that includes currency in circulation, bank deposits, and other financial assets that are easily convertible to cash.

As a driver of money supply, claims on the domestic sector, which include private and government entities in the country, rose by 10.1 percent year on year in December from 10.6 percent in November.

Claims on a sector represent that sector’s liabilities to depository corporations (e.g., banks and the central bank).

Claims on the private sector alone grew by 10.1 percent in December from 11.1 percent in the previous month, as bank lending growth to non-financial private corporations and households slowed.

Net claims on the central government increased by 10.8 percent in December from 11.0 percent in the previous month, driven mainly by higher borrowings.

Net foreign assets (NFAs) in peso terms rose by 6.1 percent year on year in December from 4.4 percent in November.

NFAs represent the difference between claims on nonresidents and liabilities to nonresidents of depository corporations.

NFAs of the BSP increased by 5.3 percent.

Similarly, NFAs of banks grew, primarily on account of larger holdings of foreign currency-denominated debt securities. The BSP will continue to ensure that domestic liquidity conditions remain consistent with its price and financial stability objectives.