Bank lending growth slows to 10.5% in September

Bank lending by universal and commercial banks in the Philippines expanded by 10.5 percent year-on-year in September, easing from 11.2 percent growth in August, according to preliminary data.

After adjusting for seasonal effects, total outstanding loans rose by 0.3 percent month-on-month in September.

Loans extended to residents increased by 10.9 percent in September, down from 11.6 percent in August.

Meanwhile, loans to non-residents declined at a slower pace of 2.9 percent, compared to a 5.9-percent drop in the previous month.

Lending for production activities grew by 9.1 percent in September, moderating from 9.9 percent the month before.

Sectors that saw increased lending include real estate activities (9.2 percent), electricity, gas, steam, and air-conditioning supply (27.1 percent), and wholesale and retail trade, including motor vehicle and motorcycle repair (9.1 percent).

Other industries that posted gains were financial and insurance activities (8.8 percent), information and communication (8.6 percent), and transportation and storage (15.4 percent).

Consumer loans to residents—covering credit card, motor vehicle, and salary loans—rose by 23.5 percent, slightly down from 23.9 percent in August.

The Bangko Sentral ng Pilipinas (BSP) tracks bank lending as a vital component of its monetary policy transmission framework.

Looking ahead, the BSP said it remains committed to keeping domestic liquidity and bank credit conditions consistent with its price and financial stability mandates.

Growth in lending reflects continued economic activity but also signals potential headwinds as tighter monetary conditions begin to take hold.

The moderation in credit expansion is significant to policymakers and the public, as it impacts both inflation dynamics and overall financial market health.