Domestic liquidity grows by 5.7 percent, year-on-year, in July 2023

Preliminary data showed that domestic liquidity (M3) grew by 5.7 percent year-on-year to about ₱16.2 trillion in July 2023 from 5.9 percent in June.

On a month-on-month seasonally-adjusted basis, M3 increased by about 0.2 percent.

Domestic claims rose by 8.9 percent year-on-year in July from 10.1 percent in the previous month.

Claims on the private sector expanded by 8.2 percent in July from 7.9 percent in June, driven by growth in bank lending to non-financial private corporations and households.

Net claims on the central government grew by 12.5 percent in July from 17.2 percent in June due mainly to the borrowings by the National Government.

Net foreign assets (NFA) in peso terms fell by 2.6 percent year-on-year in July following a 2.8-percent decline in June.

The Bangko Sentral ng Pilipinas’s (BSP) NFA position decreased by 0.5 percent in July after contracting by 0.6 percent in the previous month. Similarly, the NFA of banks declined due to a contraction in interbank loans receivable and deposits maintained with nonresident banks.

Looking ahead, the BSP said it 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.