Domestic Liquidity Quickens in September

Preliminary data show that domestic liquidity (M3) grew by 7.7 percent year-on-year to about ?12.0 trillion in September 2019, faster than the 6.3-percent (revised) growth in August. On a month-on-month seasonally-adjusted basis, M3 increased by 1.5 percent.

Demand for credit remained the principal driver of money supply growth. Domestic claims grew by 7.5 percent in September from 7.1 percent (revised) in the previous month due mainly to the sustained growth in credit to the private sector. Loans for production activities continued to be driven by lending to key sectors such as real estate activities; financial and insurance activities; construction; electricity, gas, steam and airconditioning supply; and wholesale and retail trade, repair of motor vehicles and motorcycles.

Loans for household consumption increased due to the growth in motor vehicle loans, credit card loans, and salary-based general purpose consumption loans during the month. Meanwhile, net claims on the central government grew by 6.0 percent in September from 2.4 percent (revised) in August, reflecting the increased borrowings by the National Government.

Net foreign assets (NFA) in peso terms expanded by 8.3 percent in September from 8.9 percent in the previous month. The BSP's NFA position increased during the month, supported by foreign exchange inflows coming mainly from overseas Filipinos' remittances and business process outsourcing receipts. By contrast, the NFA of banks decreased as their foreign liabilities rose due to increased placements and deposits made by foreign banks with their local branches and other banks.

The BSP will continue to monitor domestic liquidity dynamics to ensure that overall monetary conditions remain in line with maintaining the BSP's price and financial stability objectives.

Source: Singapore Police Force