November M3 growth slowest in more than 2 years

Reuters

Posted at Dec 29 2014 07:14 PM | Updated as of Dec 30 2014 04:16 AM

MANILA (UPDATE) – The country's money supply growth slowed down to 9 percent in November, the slowest since October 2012 when M3 growth was recorded at 8.7 percent.

The Bangko Sentral ng Pilipinas (BSP) said M3 or domestic liquidity (M3) grew by 9 percent year-on-year in November to reach P7.3 trillion. M3 growth decelerated from the 15.4 percent expansion recorded in October.

Month-on-month seasonally adjusted money supply in November contracted 1.2 percent, the central bank said in a statement.

“The deceleration in M3 growth during the month could be attributed in part to the increase in placements of trust entities in the BSP’s special deposit account (SDA) facility relative to a year ago. The slower M3 growth in November 2014 also reflects statistical base effects associated with the significant increase in domestic liquidity a year ago of 34.3 percent following the operational adjustments involving access of trust entities to the BSP SDA facility, which were completed in November 2013,” BSP said.

The central bank expects money liquidity growth to moderate further as previous policy actions take hold.

“Going forward, the BSP remains prepared to take appropriate action as necessary to ensure that liquidity conditions continue to support the BSP’s objectives of maintaining price and financial stability,” the BSP said.

The Philippine economy slowed to its weakest pace in more than five years in the third quarter, hurt by a decline in public spending and farm output and signaling a longer-than-expected pause in the central bank's tightening cycle.

Production loans, comprising about four-fifths of commercial banks' loan portfolios, grew 18.6 percent in November from a year earlier, slower than the previous month's 19.7 percent rise.

Consumer loans, meanwhile, grew 20.7 percent after a 17.3 percent rise in October.