Bank lending grows 12.1% in May

Bank lending by universal and commercial banks rose 12.1% year-on-year in May, accelerating from the previous month and signaling sustained credit demand from companies and households in the second quarter of 2026, the Bangko Sentral ng Pilipinas said.

The BSP said the latest growth reflected banks’ expectations of steady loan demand from businesses and households in Q2 2026, based on the results of the Q1 2026 Senior Bank Loan Officers’ Survey.

Outstanding loans to residents grew 12.6% year-on-year in May, with resident loans accounting for the bulk of total outstanding loans and loans to non-residents making up a smaller share.

Loans for business activities expanded 11.7% in May as banks continued to finance key sectors of the economy.

Lending grew 32.9% for electricity, gas, steam, and air-conditioning supply; 7.3% for real estate activities; 10.1% for wholesale and retail trade, and repair of motor vehicles and motorcycles; 6.4% for manufacturing; and 21.4% for transportation and storage.

Consumer loans to residents increased 19.0%, slower than the previous month’s 19.6% growth, as credit card and motor vehicle loans expanded at a softer pace.

The BSP monitors bank lending because loans are a key channel through which monetary policy affects consumption, investment, inflation, and overall financial conditions.

The central bank said it would continue to ensure that bank lending conditions remain aligned with its price and financial stability objectives.

The BSP’s figures exclude reverse repurchase agreements of universal and commercial banks with the central bank.

A resident refers to a Philippine citizen residing in the country; a foreign citizen permanently residing in the Philippines; a corporation or juridical person organized under Philippine law; or a branch, subsidiary, affiliate, extension office, or other unit of a foreign corporation or juridical person operating in the Philippines, except offshore banking units.

Outstanding loans to non-residents include loans by universal and commercial banks’ foreign currency deposit units to non-residents.