Published at 04:08 (GMT) 31 Oct
Domestic liquidity (M3) grew by 16.2%y/y in September to reach P7.2 trillion, slower than the (revised) 18.3%y/y expansion recorded in August. On a month-on-month basis, seasonally-adjusted M3 increased by 0.%, following the (revised) 0.7% growth in the previous month.
Outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slightly faster pace at 20.5 percent in September from the previous month's increase of 20.1 percent (revised). Similarly, bank lending inclusive of RRPs expanded by 19.5 percent from the 18.6 percent (revised) growth posted in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank lending increased by 2.1 percent for loans net of RRPs and by 2.9 percent for loans inclusive of RRPs.
Money supply continued to increase due largely to the sustained demand for credit in the domestic economy. Domestic claims grew by 16.0% in September from 14.6% (revised) in August , reflecting in part the continued expansion in credits to the private sector. In particular, the bulk of bank loans during the month were channelled to key production sectors such as wholesale and retail trade, utilities, real estate, renting, and business services, manufacturing, and financial intermediation.
At the same time, public sector credit grew by 12.9% in September from 5.5% (revised) in August as the deposits of the National Government (NG) with the BSP increased at a slower pace due largely to the withdrawal of funds by the NG for the redemption of maturing government securities.
Domestic liquidity growth is expected to further moderate to levels consistent with domestic demand, as previous monetary adjustments continue to work their way through the economy. Going forward, the BSP remains prepared to take appropriate action as necessary to ensure that liquidity conditions continue to be consistent with the BSP's objective of maintaining price and financial stability.
On FX, USD/PHP bulls took a breather as prices eased to trade between 44.800 - 44.860. Given the lack of market moving data, it is unlikely that we see major swings in prices today. PSEi trading flat into noon. BB
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