The Bangko Sentral ng Pilipinas (BSP) Wednesday reported domestic liquidity or M3 expanded by 11.6 percent year-on-year in September to P3.668 trillion, noting that this was a slower pace of growth compared to 13.4 percent in August.

BSP said the double-digit growth of domestic liquidity was due in part to the “resilient foreign exchange inflows, indicating that funds in the banking system remain adequate to support economic activity.”

BSP said M3, which was closely monitored to determine monetary policy, bank loan trends and impact on economic expansion, grew because net foreign assets (NFA) continued to increase despite that the pace of growth has slowed down to 24.1 percent in September as against 29.9 percent in August. “The slowdown in the growth of NFA followed the slower increase in the foreign assets of the BSP and other depository corporations,” BSP said in a statement.

On the other hand, net domestic assets (NDA) decreased by 0.2 percent in the same month, which was lower than the 2.8 percent decline in August. BSP said this was due partly to the “improvement in the net other items account.”

As for net domestic credit growth, this continued to slow down to 8.8 percent from 11.1 percent in August. The growth in credit extended to the public sector was 10.8 percent, also lower from the previous month’s 21.8 percent because of the slower expansion of credit extended to the National Government.

BSP said the growth in credit extended to the private sector, in the meantime, increased by 7.9 percent from August’s 6.2 percent.