MANILA — Domestic liquidity, or M3—the broadest measure of money supply—expanded by 6.6 percent year-on-year to about P18.6 trillion in August, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).

The August growth was faster than the 6.2-percent increase recorded in July. After seasonal adjustments, M3 rose by 0.5 percent month-on-month during the period.

M3 includes currency in circulation, bank deposits, and other liquid financial assets that can easily be converted to cash.

Claims on the domestic sector, which cover private and government entities, grew by 9.8 percent in August, slightly lower than the 10.5 percent in July. These claims represent the sector’s liabilities to banks and other depository institutions.

Within the domestic sector, claims on the private sector rose by 11.1 percent, reflecting sustained growth in bank lending to corporations and households. Meanwhile, net claims on the central government increased by 6.1 percent, slower than the previous month’s 7.1 percent, due to higher government borrowings.

Net foreign assets (NFA) in peso terms climbed by 4.8 percent year-on-year in August, rebounding from a 0.6-percent decline in July. The BSP’s NFA rose by 0.7 percent, while banks’ NFA improved amid lower foreign currency-denominated payables.

The BSP said it will continue to ensure that liquidity conditions support price and financial stability in the country.