Domestic liquidity, also known as M3, grew at a slower rate for the month of August, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

Preliminary data from the BSP showed August M3 growing 6.2 percent year-on-year from the registered 6.7 percent expansion in July, which translates to about P11.9 trillion.

According to the Central Bank, demand for credit remained to be the primary growth driver of money supply amid the witnessed acceleration for such during the month.

“Domestic claims grew by 6.2 percent in August from 5.8 percent (revised) in the previous month due mainly to the sustained growth in credit to the private sector,” the BSP said.

“Loans for production activities continued to be driven by lending to key sectors such as real estate activities; financial and insurance activities; electricity, gas, steam and air-conditioning supply; construction; and wholesale and retail trade, repair of motor vehicles and motorcycles,” it added.

Bank lending decelerated with universal and commercial bank outstanding loans net of reverse repurchase (RRP) placements with the BSP stood 10.5 percent. This compares to the 11.1 percent posted in July. Likewise, bank lending inclusive of RRP grew to just 10 percent from the recorded 10.7 percent in July.

“On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRP grew by 0.7 percent,” the BSP said.