Bank lending climbs to fastest in 7 months

As demand for credit surges

MANILA, Philippines —   Bank lending accelerated further in March, marking its fastest expansion in seven months as credit demand from businesses and households continued to strengthen despite elevated inflation and global uncertainties. Preliminary data from the Bangko Sentral ng Pilipinas showed that outstanding loans of universal and commercial banks expanded by 10.7 percent year-on-year in March, faster than the revised 9.6 percent growth in February.

It marked the strongest pace since the 11.2-percent expansion recorded in August 2025. In terms of levels, total loans climbed to P14.6 trillion in March, P1.41 trillion higher than the P13.19 trillion recorded a year earlier.

Loans to residents, which account for the bulk of bank credit, grew by 11.1 percent in March from the revised 10.2-percent expansion in February. Outstanding loans to residents reached P14.3 trillion.

Meanwhile, loans to non-residents remained in negative territory, although the pace of decline eased significantly. Outstanding loans to non-residents fell by 5.9 percent in March from a 13.2-percent contraction in February, bringing the total to P303.99 billion.

Loans used to fund production activities, which comprise the largest share of bank lending, increased by 9.7 percent year-on-year in March from the 8.6-percent growth posted a month ago. It amounted to P12.32 trillion, accounting for 84.4 percent of total loans to residents.

The BSP said lending growth was driven by several key sectors, led by utilities and real estate.

Credit to the electricity, gas, steam and air-conditioning supply sector surged by 26.7 percent to P2.01 trillion, while loans to real estate activities, the largest borrower, increased by 8.8 percent to P2.9 trillion.

Loans to wholesale and retail trade, including repair of motor vehicles and motorcycles, rose by 9.3 percent to P1.62 trillion, while lending to transportation and storage expanded by 19.4 percent to P596.38 billion.

Other sectors also posted stronger growth, including accommodation and food service activities, where loans jumped by 15.7 percent to P198.82 billion, as well as agriculture, forestry and fishing, which grew by 14.8 percent to P261.48 billion.

However, some industries continued to record weak lending activity. Loans to construction declined by 5.4 percent to P488.61 billion, while credit to manufacturing remained negative, although the contraction eased to 3.3 percent from 5.8 percent previously. Manufacturing loans stood at P1.22 trillion.

Meanwhile, consumer lending continued to post double-digit growth, although the pace eased slightly in March.

Consumer loans to residents grew by 20.5 percent year-on-year, slower than the 20.8-percent expansion in February. Total consumer loans reached P1.98 trillion, accounting for about 13.5 percent of total resident loans.

Credit card loans remained the largest component of consumer lending, climbing by 27.9 percent to P1.23 trillion. Motor vehicle loans zoomed by 12.5 percent to P538.29 billion, while salary-based general-purpose consumption loans grew by 4.2 percent to P166.93 billion.

The BSP reiterated that bank lending remains an important channel through which monetary policy affects economic activity.

Separate BSP data showed that domestic liquidity grew by 12 percent to P20.4 trillion in March, faster than the 10.3-percent increase in the previous month.

Looking ahead, the BSP said it would ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives.