April money supply hits ₧16.3T, up 6.6% from March

DOMESTIC liquidity (M3) has increased in April by 6.6 percent year-on-year (Y-O-Y), data from Bangko Sentral ng Pilipinas (BSP) showed.

BSP data showed that M3 grew hit P16.3 trillion in April 2023 from the 6.2-percent (revised) growth recorded in March.

On a month-on-month seasonally-adjusted basis, M3 increased by about 0.5 percent, the BSP said in a statement last Wednesday.

The BSP also shows that domestic claims rose by 11.9 percent Y-O-Y in April from 12.4 percent in the previous month.

The central bank said claims on the private sector grew by 9.7 percent in April, the same rate of expansion recorded in March, with the sustained expansion in bank lending to non-financial private corporations and households.

Moreover, data shows that net claims on the central government also increased by 20.1 percent in April from 21.1 percent (revised) in March, owing to the decline in the deposits of the national government with the BSP.

Net foreign assets (NFA) in peso terms decreased by 0.2 percent Y-OY in April, following the 3.9-percent (revised) contraction in March.

The foreign assets of banks declined mainly on account of higher bills payable. Meanwhile, the BSP’S NFA position expanded by 2.5 percent in April after contracting in the previous month.

Looking ahead, the BSP said monetary authorities will continue to ensure that domestic liquidity conditions remain consistent with the prevailing stance of monetary policy, in line with the BSP’S price and financial stability objectives.

Michael Ricafort, chief economist of Rizal Commercial Banking Corp. said the growth of domestic liquidity in April was the fastest in four months or since December 2022. Ricafort added that April’s print is slightly faster against 6.2 percent a month ago (March 2023) but also slower against 7.3 percent a year ago or April 2022.

He added that the April M3 is still among the slowest in more than three years or since August 2019.