Liquidity to Persist for Over a Year

Abnormally-high growth rates in the country’s money supply is expected to last for over a year before slowing down to a more manageable pace, the Bangko Sentral ng Pilipinas (BSP) said.

This prolonged elevation in domestic liquidity growth will be caused mainly by banks pulling out their depositors’ funds from the BSP’s special deposit accounts (SDA), resulting in extra cash circulating in the local economy. According to the Philippine Daily Inquirer, BSP assured that this extra cash, owned by depositors with low appetite for risk, would not fuel spikes in consumer prices.

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