More Moderate M3 Growth Expected In 2017

Economic Research	1 March 2017
Philippines
Economic Update
More Moderate M3 Growth Expected In 2017 Philippines’ broad money supply (M3) growth ticked down to 12.4% YoY in January, compared with +12.7% in Nov-Dec 2016. The easing was attributed to a slowdown in net domestic claims. Going forward, we expect broad money to grow at a more moderate pace of 10% in 2017, in line withprojected softer economic growth. Private credit picked up in January. Total loans growth increased in January, on account of faster growth in loans extended to businesses and households. Going forward, we expect demand for private credit to moderate somewhat to 15.8% in 2017. This is on the back of expectations of more moderate economicgrowth. We expect key policy rate to be raised later part of this year. Going forward, Bangko Sentral ng Pilipinas (BSP) is likely to maintain its key policy rate at 3% in the near term, as inflation remains manageable, while economic growth is likely to hold up relatively well. However, we envisage the rate to be raised by 25bps in the later part of the year. Economist:  Rizki Fajar  | +6221 2970 7065