Domestic liquidity expanded at a faster pace in October, rising by 8.3 percent year-on-year to about P19.1 trillion, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP).

The latest growth rate was higher than the revised 7.6 percent increase posted in September. Seasonally adjusted figures also showed that M3, the broadest measure of money supply, increased by 1.0 percent month-on-month.

M3 covers currency in circulation, bank deposits and other liquid financial instruments that can be readily converted to cash.

The BSP said Thursday night that growth in money supply was supported by the sustained expansion in domestic claims, which rose by 10.5 percent in October from a revised 10.6 percent in September.

Domestic claims reflect the liabilities of both private and government entities to the banking system.

Claims on the private sector grew by 11.0 percent, up from the previous month’s revised 10.7 percent, driven by continued lending to non-financial private firms and households.

Net claims on the national government likewise increased by 10.0 percent, attributed mainly to higher borrowings.

Meanwhile, net foreign assets (NFAs) in peso terms climbed by 2.1 percent year-on-year in October, although slower than the 3.3 percent expansion recorded in September.

NFAs of the BSP declined by 0.4 percent, while NFAs of banks rose due to lower foreign currency-denominated bills payable.

The BSP said it will continue to ensure that liquidity conditions remain aligned with its objectives of maintaining price stability and safeguarding the financial system.

PNA PHOTO