Bank Lending Rises 11.2% in April Amid Slower Growth

Bank lending in the Philippines rose by 11.2 percent year-on-year in April 2025, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP), marking a modest deceleration from the 11.8 percent growth recorded in March.

On a month-on-month seasonally adjusted basis, outstanding loans of universal and commercial banks (U/KBs), excluding reverse repurchase (RRP) placements with the BSP, edged up by 0.3 percent in April.

Lending to residents, net of RRPs, grew by 11.9 percent—slower than the 12.4 percent increase seen in March—while loans to non-residents continued to contract, falling 10 percent in April after a 5.6 percent decline the previous month.

The slower loan growth reflects tempered credit expansion to key production sectors, with loans for production activities rising by 10.3 percent in April, down from 10.8 percent in March.

Notable slowdowns were observed in lending to real estate (8.9 percent), wholesale and retail trade (9.9 percent), manufacturing (0.6 percent), financial and insurance activities (7.5 percent), information and communication (7.7 percent), and transportation and storage (14.9 percent).

In contrast, consumer loans to residents surged by 24 percent year-on-year in April, slightly higher than March’s 23.9 percent growth, driven mainly by rising credit card use.

Meanwhile, domestic liquidity (M3)—a broad measure of money supply—expanded by 5.8 percent year-on-year to approximately PHP 18.2 trillion in April, easing from the 6.2 percent pace in March.

On a monthly basis, seasonally adjusted M3 grew by just 0.1 percent, indicating relatively stable liquidity conditions.

Domestic claims grew by 10.9 percent in April, supported by an 11.4 percent increase in credit to the private sector and a 9.4 percent rise in net claims on the central government, reflecting continued government borrowing.

Net foreign assets (NFA) in peso terms dipped 0.2 percent year-on-year in April, following a 2.6 percent increase in March, as banks faced higher foreign currency-denominated bills payable.

The BSP reiterated its commitment to maintaining liquidity and lending conditions that are consistent with its mandates for price stability and financial resilience.

As inflation settled at 1.4 percent in April, the central bank’s policy space has widened, allowing for a possible easing of interest rates to support domestic growth amid global trade uncertainties.