The country’s money supply expanded by 7% in December, but growth eased as households and businesses became more cautious in borrowing, even as government debt continued to add liquidity to the economy.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that M3—the broadest measure of money in circulation—rose to ₱20.1 trillion year-on-year, slower than the 7.6% growth recorded in November.
On a seasonally adjusted basis, money supply levels were largely unchanged month-on-month.
“M3 growth continues to be consistent with our price and financial stability objectives,” the BSP said.
Private sector credit growth moderated, with loans to households and corporations rising by 10.1% in December, down from 11.1% in November, as banks tempered lending to both non-financial firms and consumers.
Government borrowing remained a key source of liquidity, as net claims on the central government grew by 10.8%, only slightly lower than the previous month. Overall domestic claims stayed steady at a 10.1% expansion.
Meanwhile, the country’s net foreign assets improved, increasing 6.1% in peso terms from a year earlier, up from 4.4% in November. The BSP’s foreign assets rose by 5.3%, while banks also boosted holdings of foreign currency-denominated securities.
The slower pace of credit growth could mean more gradual access to loans for housing, education, and business expansion, while spending and investment may cool slightly.
Still, steady money supply growth and stronger foreign reserves are seen as buffers that help protect the economy from inflation pressures and financial shocks.