Money supply rose 12.6 percent year-on-year to P9.433 trillion in February on the back of sustained robust bank loan growth, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.
The increase last month in domestic liquidity, or the amount of money circulating in the system expressed as “M3,” was slightly faster than the 12.3-percent expansion in January, during which M3 stood at P9.364 trillion.
Money supply as of February was also higher than the P8.381 trillion a year ago.
“Demand for credit remains the principal driver of money supply growth … The growth in M3 remains consistent with the BSP’s prevailing outlook for inflation and economic activity,” the BSP said in a statement. The government targets 2 to 4 percent headline inflation for 2017, with the BSP forecasting the rate of increase in prices of basic goods settling at 3.4 percent by yearend.
Domestic claims rose 15.8 percent last month, slightly slower than January’s 15.9-percent growth “due largely to sustained growth in credit to the private sector,” the BSP said.
In February, the bulk of bank lending went to the following key production sectors: Electricity, gas, steam and air-conditioning supply; financial and insurance activities; manufacturing; real estate activities; as well as wholesale and retail trade, including repair of motor vehicles and motorcycles.
Net claims on the central government grew 17.3 percent last February, slower than the 19.2-percent expansion in January, due to “increased borrowings as part of national government cash operations and the continued withdrawal by the national government of its deposits with the BSP.”
Net foreign assets (NFA) in peso terms, meanwhile, climbed by a slower 7.2 percent from 8.7 percent a month ago.
“Foreign exchange inflows coming from overseas Filipinos’ remittances and business process outsourcing receipts continued to be the main drivers behind the increase in the BSP’s NFA position,” the BSP said. —BEN O. DE VERA