Bank lending and domestic liquidity saw notable growth in November, signaling a resilient financial environment as the Bangko Sentral ng Pilipinas (BSP) continues to manage the balance between economic expansion and financial stability.
Preliminary data released by the BSP revealed that the outstanding loans of universal and commercial banks (U/KBs), excluding reverse repurchase (RRP) placements with the BSP, grew by 11.1 percent year-on-year in November, a slight increase from October’s 10.6 percent. On a month-on-month seasonally-adjusted basis, loans grew by 1.0 percent, reflecting steady demand for credit.
Lending to residents, which accounted for the bulk of loans, expanded by 11.3 percent in November from 10.7 percent in October. In contrast, loans to non-residents grew at a slower pace of 3.8 percent in November, down from 6.9 percent the month prior.
The bulk of loan growth was seen in production activities, with lending to key industries such as wholesale and retail trade, electricity supply, and financial services driving a 9.8 percent increase in business loans. Consumer loans continued their strong performance, up 23.3 percent in November, albeit slightly slower than the 24.0 percent growth in October. This increase was largely fueled by higher demand for credit card and motor vehicle loans.
On the liquidity front, domestic liquidity (M3) expanded by 7.7 percent year-on-year to ₱18.1 trillion in November, up from 5.4 percent growth in October. Month-on-month, M3 rose by 1.9 percent on a seasonally-adjusted basis, indicating continued liquidity growth.
Domestic claims, a measure of overall credit activity, grew by 10.8 percent year-on-year in November, compared to 10.0 percent in October. Claims on the private sector, particularly bank loans to non-financial corporations and households, grew by 11.7 percent. Meanwhile, net claims on the central government rose by 9.2 percent, partly due to ongoing borrowings by the National Government.
The BSP’s foreign assets saw a steady rise, with net foreign assets (NFA) in peso terms up by 9.8 percent year-on-year in November. This was primarily driven by a 12.8 percent increase in the BSP’s NFA, reflecting higher gross international reserves, although the NFA of commercial banks contracted due to higher liabilities.
Looking ahead, the BSP reaffirmed its commitment to maintaining domestic liquidity and lending conditions that are aligned with its overarching objectives of price and financial stability. “We will continue to ensure that domestic liquidity remains consistent with the stance of our monetary policy,” the BSP said, underlining its vigilance in balancing economic growth with inflation control and financial market stability.
