THE country’s domestic liquidity grew 5.4 percent in November 2022 on the back of the double-digit growth in domestic claims, according to the latest report from the Bangko Sentral ng Pilipinas (BSP).
In a report, BSP said domestic liquidity reached P15.6 trillion in November 2022. This was the same rate recorded in October 2022 and was higher than the 1.2 percent growth posted in November 2021.
BSP data showed that on a month-on-month seasonally-adjusted basis, M3 contracted 0.6 percent.
“Looking ahead, the BSP will ensure that domestic liquidity conditions remain appropriate to support the prevailing stance of monetary policy, and continue to prioritize its inflation control and financial stability objectives,” BSP said in a statement.
The preliminary data showed domestic claims rose by 10.8 percent year-on-year in November 2022 from 11 percent in the previous month with the steady pace of bank lending to the private sector.
Claims on the private sector grew by 10.4 percent in November from the same growth rate posted in October, due to the sustained expansion in bank lending to non-financial private corporations and households.
Net claims on the central government also rose by 13.8 percent in November from 14.7 percent in October owing mainly to the borrowings by the National Government.
Meanwhile, net foreign assets (NFA) in peso terms declined by 1.8 percent in November from the 1.4-percent contraction in October.
The NFA of banks fell mainly on account of higher bills payable. Similarly, the BSP’s NFA position contracted by 1.0 percent in November 2022.
Meanwhile, the BSP raised the volume offering in the Term Deposit Facility auction to P390 billion from P360 billion last week.
The total offer volume was allocated between the 7-day and 14-day tenors at P230 billion from P200 billion and P160 billion, which was the same as last week, respectively.
Both tenors were oversubscribed, with bid-to-cover ratios (BCR) at 1.033x and 1.206x for the 7-day and 14-day TDF, respectively.
Nonetheless, total tenders received reached P430.617 billion, which was within the BSP’s expected volume range.
“The results of the TDF auction came as eligible counterparties brought back their cash to the BSP’s facilities after the holidays. Going forward, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” the BSP said.
Of the total bids received, the BSP accepted P390 billion. The BSP awarded P230 billion from P237.656 billion in bids in the 7-day tenor and accepted P160 billion from P192.961 billion in bids in the 14-day tenor.
The resulting weighted average interest rates (WAIR) for the awarded bids in both tenors continued to rise from last week.
The WAIR for the 7-day TDF rose by 4.6214 basis points (bps) to 6.3322 percent whereas that for the 14-day TDF increased by 3.7709 bps to 6.4180 percent.
The yields accepted for the 7-day tenor shifted higher and narrowed to 6.2445-6.4200 percent, while that for the 14-day tenor narrowed to 6.2445-6.5000 percent.