Money supply further grew in May

MONEY supply grew by a faster 13.5 percent year-on-year to P8.7 trillion in May on the back of sustained credit demand, preliminary Bangko Sentral ng Pilipinas (BSP) data released yesterday showed.

Last May, the increase in domestic liquidity or the amount of money circulating in the system—expressed as “M3”—surpassed the 12.8-percent growth rate in April, during which M3 stood at P8.6 trillion.

Money supply as of May was also higher than the P7.6 trillion a year ago.

“Money supply continued to expand due largely to sustained demand for credit… The sustained expansion of M3 during the month indicates that money supply remains sufficient to support economic growth,” the BSP said in a statement.

Domestic claims rose 18.7 percent, slightly faster than the 18.4-percent growth last April because “credits to the private sector increased at a faster pace,” the BSP said.

In May, the bulk of bank loans went to the following key production sectors: financial and insurance activities; information and communication; real estate activities; and wholesale and retail trade, and repair of motor vehicles and motorcycles.

Net claims on the central government, meanwhile, climbed 35 percent, although slower than the 41.9-percent jump in the previous month.

Net foreign assets (NFA) in peso terms increased 9 percent, a faster pace than the 8-percent growth posted a month ago.

“The BSP’s NFA position continued to expand … on the back of robust foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and portfolio investments,” it said. Ben O. de Vera