BSP reports 6.6% rise in domestic liquidity in August

Domestic liquidity (M3), the broadest measure of money circulating in the economy, rose 6.6 percent year-on-year to about P18.6 trillion in August, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP). This marked a faster pace compared to July’s 6.2 percent expansion, signaling sustained credit and investment activity.

On a seasonally adjusted basis, M3 grew 0.5 percent month-on-month, pointing to steady capital flows within the financial system.

The increase was largely supported by bank lending, with claims on the private sector expanding by 11.1 percent in August from 11.0 percent the previous month. This reflected continued borrowing by non-financial corporations and households, a trend seen as a driver of business expansion and consumer demand.

Government borrowings also supported liquidity growth, with net claims on the central government rising 6.1 percent, though slightly slower than July’s 7.1 percent increase.

Meanwhile, net foreign assets (NFA) climbed 4.8 percent year-on-year in August, reversing a 0.6 percent drop in July. The BSP’s own NFA rose by 0.7 percent, while banks’ NFA benefited from lower foreign currency-denominated bills payable.

The BSP said it will continue to ensure liquidity conditions remain aligned with its twin objectives of price stability and financial system stability.

For businesses and investors, the latest liquidity data points to continued credit availability, which could support expansion plans, capital spending, and broader economic recovery momentum heading into the last quarter of 2025.