But the bank said in a statement it expects an acceleration in money supply growth in the coming months, with domestic demand likely to pick up as indicated by some economic figures such as power sales growth.
Money supply – consisting of money in circulation, demand deposits, peso savings, and time deposits or quasi-money and deposit substitutes held by the general public – reached P1.64 trillion ($29.5 billion) as of end-October.
"Growth in private sector credit continued to be modest due to the still relatively low demand for loans by the private sector," the BSP said.
"The growth in bank lending remained modest at 3.9 percent as of end-September from the year-ago level as the improvement in real sector activity, particularly manufacturing, has remained uneven and tentative."
The central bank has kept its benchmark interest rates unchanged despite the recent weakness in the peso. It has kept its overnight borrowing and lending rates at 6.75 percent and nine percent since July when it cut rates by 25 basis points.
BSP governor Rafael Buenaventura told reporters "supply and demand forces" were at work as the peso appreciated to end at 55.49 to the dollar on Tuesday from its previous local close at 55.52.
The peso has slowly been gaining strength after falling to a new all-time intra-day low of 55.85 last week largely on political concerns following the announcement of a popular movie actor Fernando Poe Jr. that he will run in next May’s presidential polls.