Domestic liquidity (M3), a broad measure of money circulating in the economy, expanded by 5.5 percent year-on-year to around P18.4 trillion in May 2025, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP). This growth was slower than the 5.8 percent recorded in April.
Month-on-month, M3 increased by 0.7 percent in May after adjusting for seasonal fluctuations.
M3 encompasses currencies in circulation, bank deposits, and other financial assets readily convertible to cash.
Claims on the domestic sector, covering both private and government entities, rose by 10.7 percent year-on-year in May, a slight decrease from 10.9 percent in April.
Within this, claims on the private sector alone grew by 10.9 percent in May, down from 11.5 percent the previous month. This was attributed to the continued expansion of bank lending to non-financial private corporations and households.
Net claims on the central government increased by 9.1 percent, from 9.3 percent, driven by higher government borrowings.
Net foreign assets (NFA) in peso terms saw a 4.6 percent year-on-year decrease in May, a sharper decline compared to the 0.2 percent drop in April.
The BSP’s NFA fell by 4.4 percent, primarily due to the peso’s appreciation against the US dollar. Banks’ NFA also declined, largely due to higher foreign currency-denominated bills payable.
The BSP reiterated its commitment to ensuring that domestic liquidity conditions align with the prevailing monetary policy stance, in line with its objectives of price and financial stability.
