Domestic liquidity, or M3, grew in June due to the sustained expansion in bank lending to non-financial private corporations and households, Bangko Sentral ng Pilipinas said on Thursday.

Preliminary data from BSP showed that M3 grew by 5.9 percent year-on-year to about P16.4 trillion in June 2023 from 6.6 percent in May. On a month-on-month seasonally-adjusted basis, M3 increased by about 0.2 percent.

Domestic claims rose 10.1 percent year-on-year in June from 11.4 percent in the previous month. Claims in the private sector grew by 7.9 percent in June from 9.3 percent in May.

Claims grow 17.2%

Net claims on the central government also expanded by 17.2 percent in June from 18.3 percent in May, owing mainly to the borrowings by the National Government.

Net foreign assets in peso terms fell by 2.8 percent year-on-year in June following a 2.7-percent expansion in May.

The BSP's NFA position declined by 0.6 percent in June after increasing by 4.2 percent in the previous month. Meanwhile, the NFA of banks declined on account of higher bills payable.

"Looking ahead, the BSP will continue to ensure that domestic liquidity conditions remain in line with the BSP's price and financial stability objectives," BSP said.