MONEY SUPPLY EXPANDS 12.8% TO P2.21T AS OF JUNE
MANILA, August 1 (STAR) By Donnabelle L. Gatdula - The Bangko Sentral ng Pilipinas (BSP) reported that demand for money continued its strong growth in June as domestic liquidity (M3) rose by 12.8 percent year-on-year to P2.21 trillion.
Based on the BSP’s Depository Corporations Survey (DCS), M3, in absolute terms, reached P2.21 trillion as of end-June this year from P1.9 trillion a year earlier.
The BSP data said the M3 level was a further acceleration from the 12.2 percent year-on-year increase in M3 recorded in May 2005.
DCS, which replaces the Monetary Survey (MS) as the basis for measuring M3, features an expanded list of surveyed institutions that include the BSP, commercial banks, thrift banks, rural banks, non-stock savings and loan associations and non-banks with quasi-banking functions.
The BSP noted that previously-used MS included only data from the BSP, the commercial banks and some rural banks.
On a monthly basis, the BSP said M3 rose steadily by 1.4 percent in June from P2.17 trillion in May.
Foreign currency deposit unit (FCDU) deposits as of end-June increased to P777.9 billion from the 2004 level of P727.6 billion, an expansion of 6.9 percent.
The BSP said the continued rise in M3 can be traced mainly to the build-up in banks’ foreign exchange position on the back of robust forex inflows.
Deposit money banks’ (DMBs) net foreign assets more than tripled due to robust forex inflows coming from remittances by overseas Filipino workers and portfolio investments.
As of June this year, DMBs’ net foreign assets amounted to P53.9 billion as against a shortfall of P79.2 billion in the comparative period last year.
According to the DCS, the improvement in the BSP’s net international reserves (NIR) – arising from lower foreign liabilities and accumulation of foreign assets – helped sustain the expansion in M3.
The NIR as of end-June rose to P932.6 billion, 17.89 percent higher than P791.09 billion in the same period in 2004. Under the NIR, medium and long-term liabilities dropped to P120.4 billion from P155.7 billion last year.
Private sector credits rose by 5.3 percent for the month as the overall pace of bank lending activity picked up or from P1.76 billion as of June 2004 to P1.8 billion in the same period this year.
Public sector credits, on the other hand, contracted by 5.23 percent in June with credits to both the National Government and semi-government entities declining.
In absolute terms, credits to the public sector dropped to P877 billion in end-June 2005 as against P926 billion last year.
Net claims on NG, on the other hand, declined by 4.71 percent to P681.24 billion as of end-June this year to P714 billion in the same period last year. Local government and other public entities’ net claims declined by 8.12 percent to P196.6 billion from the year-ago level of P211.4 billion.
The decline in credits to the NG may be attributed to recent improvements in the NG’s fiscal position that resulted in lower net borrowings from the financial system.
Monetary authorities said they would continue monitoring the level of money supply in the financial system to ensure an appropriate level of liquidity to support the economy’s growth requirements, while guarding against any build-up in price pressures.
US car firms worried over proposed RP-Japan FTA By Marianne V. Go The Philippine Star 08/01/2005
The Philippines’s pending free trade agreement (FTA) with Japan is causing some concern to American car manufacturers which, in turn, are lobbying with the US government to intercede with the Arroyo administration.
American car manufacturers Ford and General Motors are concerned specifically with a possible provision in the Japan-Philippines Economic Partnership Agreement (JPEPA) that would give preferential tariff to smaller engine Japanese automotives to the detriment of US vehicles especially those with a big engine displacement.
The US government, in a video conference last Friday, expressed its trade concerns to Philippine trade officials.
Aside from the JPEPA concerns, the US authorities also reportedly expressed their sentiment on Executive Orders 418 and 419 which impose a P500,000 additional specific tax on imported used vehicles and increased the import duty on big engine vehicles.
Ford Motor Philippines is exempted from the gas guzzler tax because it is the lone participant in the Automotive Export Program (AEP).
But GM is directly affected by the gas guzzler tax because it imports completely built units from the US.
EO 419 imposes a 25-percent tariff on imported CBUs with an engine displacement of over 2,100 cc.
Previously, the tariff on imported big engine CBUs was only 20 percent.
Reported by: Sol Jose Vanzi
© Copyright, 2005
by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved
PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE