Bank lending grows 11.4% as liquidity hits PHP 20.7 trillion

MANILA — Bank lending expanded by 11.4% in September while domestic liquidity rose by 9.3% to PHP 20.7 trillion, according to preliminary Bangko Sentral ng Pilipinas data released Thursday.

The expansion shows that businesses and households kept borrowing before the BSP raised its policy rate on Nov. 4. For the public, that credit can support spending and investment, but higher interest rates may lift monthly debt costs as inflation remains elevated.

Loans from universal and commercial banks, excluding reverse repurchase agreements with the BSP, reached PHP 15.265 trillion in September. Growth accelerated from 11.0% in August.

Outstanding loans to residents, which made up most bank lending, increased by 11.7% to PHP 14.952 trillion from a year earlier.

Loans for production activities of resident enterprises grew by 11.0% to PHP 12.837 trillion.

The BSP traced the increase to electricity, gas, steam, and air-conditioning supply, manufacturing, real estate, transportation and storage, wholesale and retail trade, motor vehicle and motorcycle repair, and financial and insurance activities.

Electricity and related utilities held PHP 2.138 trillion in loans, up 26.6%, while manufacturing credit increased by 14.5% to PHP 1.328 trillion.

Real estate remained the largest business category at PHP 2.928 trillion, up 5.3%. Wholesale and retail trade loans reached PHP 1.679 trillion, up 7.3%.

Mining and quarrying posted the fastest annual increase at 55.2%, followed by accommodation and food services at 27.4% and electricity and related utilities at 26.6%.

Construction loans fell by 11.6%, arts and recreation credit declined by 8.8%, and education loans dropped by 3.9%.

Consumer loans to residents climbed by 16.2% to PHP 2.115 trillion and accounted for 13.9% of total loans net of reverse repurchase agreements.

Credit card balances rose by 22.8% to PHP 1.344 trillion, or 8.8% of total loans. Motor vehicle loans grew by 5.0% to PHP 542.032 billion.

Salary-based general purpose consumption loans increased by 17.5% to PHP 193.804 billion, while other consumer loans fell by 22.3% to PHP 34.645 billion.

Loans placed under BSP reverse repurchase agreements stood at PHP 565.800 billion, down 3.8% from a year earlier.

Gross loans to residents reached PHP 15.518 trillion, up 11.0%, while loans to nonresidents declined by 0.6% to PHP 313.394 billion.

Total loans to residents and nonresidents, including reverse repurchase agreements, rose by 10.8% to PHP 15.831 trillion.

Including loans of domestic banks’ foreign offices, interbank loans, and other memorandum items, total outstanding credit reached PHP 16.781 trillion.

Money supply, also called domestic liquidity or M3, increased to PHP 20.702 trillion in September from PHP 18.944 trillion a year earlier.

M3 rose by 0.4% from August before seasonal adjustment and by 0.2% after seasonal adjustment.

Domestic claims grew by 12.0% to PHP 24.072 trillion as borrowing by the private and public sectors continued to expand.

Net claims on the central government increased by 14.2% to PHP 6.499 trillion. The BSP said government debt issuance and withdrawals of deposits from the central bank and commercial banks added liquidity.

Claims on the private sector rose by 12.4% to PHP 15.561 trillion. Loans to production sectors and households made up 98% of that category, the BSP said.

Claims on state and local governments increased by 5.2% to PHP 257.143 billion, while claims on public nonfinancial corporations fell by 14.6% to PHP 226.943 billion.

These increases were partly offset by a 6.4% contraction in net foreign assets to PHP 6.724 trillion.

The BSP’s net foreign assets declined by 2.3% to PHP 6.210 trillion. Other depository corporations recorded a 38.0% drop to PHP 514.246 billion, mainly because their holdings of foreign debt securities decreased.

The broader M4 measure grew by 9.6% to PHP 24.533 trillion. M2 increased by 8.0% to PHP 20.062 trillion, while M1 rose by 6.5% to PHP 7.960 trillion.

Time deposits increased by 15.0% to PHP 4.778 trillion, while savings deposits grew by 5.5% to PHP 7.324 trillion.

Foreign currency deposits of residents rose by 11.6% to PHP 3.831 trillion. Securities other than shares included in broad money jumped by 70.8% to PHP 639.813 billion.

The BSP raised its target reverse repurchase rate by 50 basis points to 5.50% on Nov. 4. It also set the overnight deposit rate at 5.00% and the overnight lending rate at 6.00%.

“This decisive adjustment will appropriately tighten monetary conditions. It will help contain spillover effects and firmly anchor inflation expectations,” the BSP said in its policy statement.

The move followed an acceleration in headline inflation to 7.8% in October from 7.2% in September, according to the Philippine Statistics Authority.

The BSP said bank lending is a key channel through which monetary policy affects the economy. It pledged to keep lending and liquidity conditions consistent with price and financial stability.

The BSP must restrain prices without choking credit.

Bank lending data

Levels are in PHP million. Growth and shares are in percent. September 2026 figures are preliminary. Loans are net of amortization and use the 2009 Philippine Standard Industrial Classification.

M4 equals M3 plus resident foreign currency deposits.

M3 equals M2 plus securities other than shares included in broad money.

M2 equals M1 plus other deposits included in broad money.

M1 equals currency outside depository corporations plus transferable deposits included in broad money.

M3 may also be derived as net foreign assets plus domestic claims, less resident foreign currency deposits and liabilities excluded from broad money.

Central bank net foreign assets are based on a revised Central Bank Survey. Details may not add to totals because of rounding.

Sources

Bangko Sentral ng Pilipinas, Bank Lending Expands by 11.4% in September, Nov. 5, 2026.

Bangko Sentral ng Pilipinas, Domestic Liquidity Grows by 9.3% in September, Nov. 5, 2026.

Bangko Sentral ng Pilipinas, monetary policy statement, Nov. 4, 2026.

Philippine Statistics Authority, Summary Inflation Report for October 2026, Nov. 5, 2026.