MANILA — Growth in money circulating within the Philippine economy accelerated in March, with domestic liquidity expanding by 12 percent, according to preliminary data released by the Bangko Sentral ng Pilipinas.

The BSP said domestic liquidity, or M3, rose to PHP20.4 trillion during the month. M3 refers to the total money supply in banks, currency in circulation, and other financial assets that can easily be converted into cash.

The central bank attributed the faster growth to the continued increase in borrowings by private firms and households.

According to the BSP, borrowings by non-financial private corporations and households grew by 11.9 percent in March, faster than the 10.6-percent expansion recorded in February.

Net claims on the national government also increased by 12.1 percent, largely due to the issuance of government securities.

Meanwhile, net foreign assets (NFAs), which measure the difference between the claims of non-residents and their liabilities in depository institutions, expanded by 8.6 percent during the month from 7.5 percent in February. The BSP’s own NFA position also increased by 4.9 percent.

Bank lending likewise posted stronger growth in March, rising by 10.7 percent year-on-year compared to 9.6 percent in the previous month.

The BSP said the increase in lending provided “stronger support for production activities of businesses and consumption of households.”

Loans for business activities expanded by 9.7 percent in March, improving from 8.6 percent in February.

Among the sectors that recorded higher loan growth were electricity, gas, steam, and air-conditioning supply at 26.7 percent; transportation and storage at 9.4 percent; wholesale and retail trade, including repair of motor vehicles and motorcycles, at 9.3 percent; and real estate activities at 8.8 percent.

Consumer loans, however, posted a slightly slower growth of 20.5 percent from 20.8 percent previously, which the BSP attributed to slower growth in motor vehicle loans and salary-based general purpose consumption loans.

The central bank said it continues to monitor bank lending activities closely, noting that these serve as a key transmission channel for monetary policy.

The BSP also said it would ensure that domestic liquidity and lending conditions remain consistent with its objectives of maintaining price and financial stability. (PNA)