Manila, Philippines — Bank lending in the Philippines continued to expand in December, although at a slower pace, with loans from universal and commercial banks (U/KBs) increasing by 9.2 percent year-on-year, down from 10.3 percent in November, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP).
On a month-on-month basis, and after adjusting for seasonal fluctuations, outstanding loans of U/KBs declined by 2.0 percent in December, indicating a moderation in lending activity toward the end of the year.
Data showed that outstanding loans to residents expanded by 9.7 percent in December, slower than the 10.7 percent growth recorded in the previous month. Meanwhile, loans to non-residents declined by 8.1 percent, a sharper contraction compared with the 4.5 percent decrease posted in November. This suggests weaker foreign credit demand relative to domestic borrowing.
Business Lending Remains Positive
Despite the overall deceleration, loans intended to finance business activities continued to grow, posting an 8.0 percent year-on-year increase in December. Several key sectors recorded notable expansions in credit, reflecting sustained economic activity.
Lending to the real estate sector grew by 8.3 percent, while loans to the electricity, gas, steam, and air-conditioning supply sector surged by 26.8 percent, marking the fastest growth among major industries. The wholesale and retail trade sector, including the repair of motor vehicles and motorcycles, saw lending rise by 10.8 percent, while financial and insurance activities posted a 3.9 percent increase.
These trends indicate that banks continued to support productive sectors of the economy, particularly in utilities, trade, and property-related activities.
Consumer Loans Still Robust
Consumer loans to residents remained strong, growing by 21.4 percent in December, although slightly lower than the 22.9 percent expansion in November. These loans include credit card receivables, motor vehicle loans, and general-purpose salary loans, highlighting sustained household demand for credit, especially for consumption and personal financing.
BSP Outlook
The BSP emphasized that bank lending is a crucial channel for the transmission of monetary policy, as it directly affects spending, investment, and overall economic activity.
Looking ahead, the central bank said it will continue to closely monitor credit conditions and ensure that domestic liquidity and bank lending remain consistent with its price stability and financial stability mandates, as it balances economic growth with inflation control and financial sector resilience. #END
Source: BSP Press Release