Preliminary data show that domestic liquidity (M3) grew by 8.3 percent year-on-year to about ₱14.2 trillion in March 2021. This was slower than the 9.4-percent expansion in February. On a month-on-month seasonally adjusted basis, M3 increased by 0.7 percent.

Domestic claims rose by 5.6 percent year-on-year in March from 5.7 percent (revised) in the previous month due mainly to the modest expansion in net claims on the central government, even as bank lending to the private sector remained weak. Net claims on the central government grew by 47.4 percent in March from 46.5 percent (revised) in February, owing partly to the sustained borrowings by the National Government.

Net foreign assets (NFA) in peso terms increased by 18.1 percent in March from 21.8 percent in February. The expansion in the BSP’s NFA position reflected the increase in the country’s level of gross international reserves relative to the same period a year ago. Meanwhile, the NFA of banks rose at a slower pace compared to last month. Banks’ foreign liabilities continued to decline, albeit at a slower pace, on account of lower bills payables.

Looking ahead, the BSP shall continue to ensure that the overall stance of monetary policy remains in line with the BSP’s price and financial stability objectives, while providing support to the National Government’s efforts to combat the impact of the health crisis on the economy.