Domestic liquidity continued to expand at a healthy pace in December, reinforcing signs of steady economic activity as the year closed. Preliminary data showed that money supply, or M3, grew by 7.0 percent year-on-year to reach ₱20.1 trillion, reflecting resilient demand across both the private and public sectors.
Although slightly slower than November’s 7.6-percent growth, the December figure indicates that liquidity conditions remain supportive of economic expansion. On a seasonally adjusted basis, M3 was broadly stable from the previous month, suggesting that monetary conditions are balanced and orderly.
M3, a key gauge of liquidity in the financial system, covers currency in circulation, bank deposits, and other financial instruments readily convertible to cash. Its sustained growth signals continued credit activity and spending capacity in the broader economy.
Driving the expansion were stronger claims on the domestic sector, which rose by 10.1 percent year-on-year in December. While this marked a modest easing from November’s 10.6 percent, it underscores continued lending activity to both government and private borrowers.
Credit to the private sector grew by 10.1 percent, supported by ongoing bank lending to corporations and households. Although lending growth moderated from the previous month, it remains in double digits—an encouraging sign of business confidence and consumer demand.
Meanwhile, net claims on the central government increased by 10.8 percent, reflecting active fiscal operations and sustained public spending initiatives. Higher government borrowings are expected to continue supporting infrastructure development and economic programs.
External buffers also strengthened during the period. Net foreign assets (NFAs) in peso terms rose by 6.1 percent year-on-year, improving from 4.4 percent in November. The increase was driven by higher foreign asset holdings of both the Bangko Sentral ng Pilipinas (BSP) and banks, including expanded investments in foreign currency-denominated debt securities.
The BSP’s own NFAs grew by 5.3 percent, signaling continued resilience in the country’s external position.
With liquidity expanding at a measured pace and foreign assets improving, monetary authorities said they will continue to calibrate policy tools to ensure that liquidity conditions remain aligned with price and financial stability objectives.
The latest data suggest that the Philippine financial system remains well-supported by ample liquidity, providing a stable foundation for sustained growth as the economy moves further into the new year.