Domestic liquidity grew by 10.6 percent year-on-year in December to reach P5.2 trillion, a press release from the Bangko Sentral ng Pilipinas said.

The growth in money supply was driven by the expansion in net domestic assets by 19.2 percent y-o-y in December from 18.4 percent in the previous month, largely as a result of the sustained increase in net domestic credits, the press release said.

Net domestic credits grew by 7.8 percent, buoyed by the expansion in the claims on the private sector due to robust lending activity by commercial banks.

Meanwhile, claims on the public sector contracted further by 14.0 percent in December (after declining by 9.5 percent in the previous month) as deposits of the national government increased, reflecting the proceeds from the issuance of 25-year Retail Treasury Bonds in October.

Meanwhile, Net Foreign Assets decreased slightly by 0.1 percent y-o-y in December following a decline of 1.0 percent in November.

The BSP’s NFA position increased by 4.2 percent, supported by steady foreign exchange inflows from overseas remittances and portfolio investments.

However, the NFA of banks contracted further in December, driven largely by the continued increase in their foreign liabilities due to higher placements and deposits made by foreign banks with their local branches, the press release said.*

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