The Philippines' money supply growth picked up speed in October 2025, signaling robust underlying economic activity, according to the latest data from the nation's central bank.
M3 Liquidity Expands at Faster Pace
Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday night, December 4, 2025, shows that domestic liquidity, measured by M3, grew by 8.3 percent year-on-year in October. This expansion brought the total money supply to approximately P19.1 trillion.
The October growth rate marks an acceleration from the revised 7.6 percent increase recorded in September 2025. On a month-on-month basis, the seasonally adjusted M3 figure also rose by 1.0 percent.
M3 represents the broadest measure of money circulating in the economy. It includes currency in the hands of the public, deposits placed with banks, and other highly liquid financial instruments that can be easily converted into cash.
Domestic Claims Drive the Expansion
The central bank stated that the sustained growth in money supply was primarily backed by the expansion in domestic claims. These claims, which reflect the banking system's liabilities to both the private sector and the government, increased by 10.5 percent in October, slightly easing from a revised 10.6 percent in September.
A closer look reveals two key drivers:
- Private Sector Lending: Claims on the private sector grew by 11.0 percent in October, up from the previous month's revised 10.7 percent. The BSP noted that this was fueled by continued bank lending to non-financial private corporations and households.
- Government Borrowing: Net claims on the National Government also increased by 10.0 percent, which the BSP attributed mainly to higher borrowings by the state.
Net Foreign Assets and Policy Stance
In contrast, the growth in Net Foreign Assets (NFA) measured in peso terms slowed down. NFAs climbed by 2.1 percent year-on-year in October, a deceleration from the 3.3 percent expansion seen in September.
This slowdown resulted from a 0.4 percent decline in the NFA position of the BSP itself. However, the NFA of banks improved due to a reduction in their foreign currency-denominated bills payable.
The Bangko Sentral ng Pilipinas reaffirmed its commitment to managing liquidity conditions. It stated it would continue to ensure that the money supply growth remains consistent with its primary goals of maintaining price stability and safeguarding the financial system.
