Domestic liquidity, also known as M3, or the amount of money in the economy, grew by 6.6 percent year-on-year to about ?18.6 trillion in August, according to preliminary data.

Growth of M3 in August was faster than the 6.2-percent increase in July. After adjusting for seasonal fluctuations, M3 increased by 0.5 percent month-on-month in August.

M3 is a broad measure of money supply that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash.

As a driver of money supply, claims on the domestic sector, which includes private and government entities in the country, rose by 9.8 percent year-on-year in August from 10.5 percent in July. Claims on a sector represent that sector's liabilities to depository corporations (e.g., banks and the central bank).

Claims on the private sector alone grew by 11.1 percent in August from 11.0 percent in the previous month, driven by the continued expansion in bank lending to non-financial private corporations and households.

Net claims on the central government increased by 6.1 percent from 7.1 percent in the previous month, driven by its higher borrowings.

Net foreign assets (NFA) in peso terms rose by 4.8 percent year-on-year in August from the 0.6-percent decline in July. NFA represent the difference between claims on nonresidents and liabilities to nonresidents of depository corporations.

The BSP’s NFA increased by 0.7 percent. The banks’ NFA also grew amid a decline in their foreign currency-denominated bills payable. Bangko Sentral ng Pilipinas