By the staff
Bank lending in the Philippines lost steam in September, hitting its weakest pace in over a year as businesses and households stayed cautious despite ample liquidity in the system.
Outstanding loans of universal and commercial banks rose 10.5% from a year earlier to P13.7 trillion, down from August’s 11.2% growth and the slowest increase since July 2024.
“Banks are steady, but borrowers are still hesitant,” said Jonathan Ravelas, senior adviser at Reyes, Tacandong & Co. “Expect lending to stay soft through the year-end unless confidence picks up. For bankers and investors, it’s time to balance prudence with strategic positioning.”
Credit for production activities, which makes up most bank lending, grew 9.1% to P11.57 trillion, slightly below August’s 9.9% expansion.
Real estate loans climbed 9.2% to P2.78 trillion while lending to the power sector jumped 27.1% toP 1.69 trillion.Manufacturing loans, by contrast, fell 10.4% to P1.16 trillion.
Consumer lending remained strong but moderated slightly, rising 23.5% to P1.82 trillion. Credit card debt jumped 29.5%, motor vehicle loans rose 18.5%, and salary-based loans increased 6.2%.
Ravelas noted that while borrowing cooled, overall liquidity in the system improved. “Meanwhile, liquidity surged as rate cuts and consumer credit lifted money supply,” he said.
BSP data showed domestic liquidity, or M3, expanding 7.3% to P18.9 trillion, faster than August’s 6.6% rise.
“The BSP monitors bank loans because they are a key transmission channel of monetary policy,” the central bank said. “Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives.”
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