Philippine liquidity expands 10.8%

Demand for money in the Philippines expanded 10.8 percent on year to 5.2 trillion pesos (127.76 billion U.S. dollars) in January, the local central bank said Thursday. "The sustained expansion in domestic liquidity indicates that previous policy actions to help support non-inflationary economic growth continue to work their way through the economy," the central bank said in a statement. The central bank slashed policy rates by an aggregate of 100 basis points last year. On a monthly basis, seasonally-adjusted domestic liquidity or M3 increased by 1.3 percent. Money supply grew by 23.3 percent on year on back of growth in net domestic assets (NDA) following the sustained increase in credits to the private sector and robust bank lending activity. Net foreign assets (NFA) decreased by 1.7 percent on year. While the central bank's NFA position increased by 4.5 percent, supported by steady foreign exchange inflows from overseas remittances, portfolio investments, and receipts from the outsourcing industry, the NFA of banks continued to contract. This is due to the sustained increase in their foreign liabilities.