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Economy

Money supply posts robust growth in September

November 10, 2009 6:23pm

The supply of money in the country continued to grow by double digits owing to resilient foreign exchange inflows, said Governor Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas on Tuesday.

Domestic liquidity or M3 reached P3.668 trillion as of end-September or P381 billion, an improvement of 11.6 percent from the P3.287 trillion recorded in the same period last year.

“The double digit growth of domestic liquidity was due in part of resilient foreign exchange inflows, indicating that funds in the banking system remain adequate to support economic activity," Tetangco said.

On a monthly basis, the BSP chief said M3 posted marginal growth of 1.6 percent from P3.608 trillion in August.

M3 is the amount of money circulating in the domestic economy. When the economy is booming and money supply is expanding at a rapid pace, the central bank normally seeks to tighten its monetary stance to ensure that hike in consumer prices is controlled.

The 24.1-percent growth in net foreign assets (NFA) to P2.335 trillion in September from P1.88 trillion in the same months last year was a factor in the growth of the domestic liquidity.

The growth was slower than the 29.9-percent expansion registered in August.

“The slowdown in the growth of NFA followed the slower increase in the foreign assets of the BSP and other depository corporations," he said.

On the other hand, data showed that net domestic assets (NDA) declined slightly by 0.2 percent to P2.4 trillion. - GMANews.TV
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