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Money
Money supply growth continues to accelerate in May
By JON VIKTOR D. CABUENAS,GMA News Money supply growth continued to accelerate in May, indicating the effect of the continued monetary policy easing of the Bangko Sentral ng Pilipinas (BSP) amid the coronavirus pandemic.
Preliminary data released by the central bank showed that the domestic liquidity (M3) grew by 16.6% to P13.7 trillion in May, faster than the 16.2% in April.
"Demand for credit remained the principal driver of money supply growth," the BSP said in an accompanying statement.
Domestic claims in May rose 16.2% from 15.0% in April, mainly on the sustained growth in credit to the private sector.
Loans for production activities continued to be driven by lending to key sectors such as real estate activities; financial and insurance activities; electricity, gas, steam, and air conditioning supply; information and communication; and transportation and storage.
On the other hand, loans for household consumption eased due mainly to the slower expansion in credit card and motor vehicle loans, which the BSP attributed to the impact of the lockdowns.
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"The continued stabilization of domestic liquidity conditions has given the BSP some room to gradually rescale its monetary operations while maintaining the accommodative stance of monetary policy," the central bank said.
"This will help the BSP’s earlier liquidity measures gain further traction by providing better guidance to short-term market interest rates," it added.
The BSP has so far cut key interest rates by a total of 175 basis points this year -- 25 basis points in February, and 50 basis points each in April, May, and June.
"The BSP stands ready to deploy its full range of instruments to ensure that liquidity and credit remain adequate to support domestic demand amid the ongoing health crisis," it said.—AOL, GMA News