The Bangko Sentral ng Pilipinas (BSP) on Thursday reported a deceleration in bank lending and liquidity growth in March, underscoring the central bank’s careful approach to maintaining price and financial stability amid evolving economic conditions.
Preliminary data showed that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the BSP, grew by 11.8 percent year-on-year in March, slightly slower than the 12.2 percent expansion recorded in February. On a seasonally adjusted month-on-month basis, lending rose by 0.9 percent.
The slowdown was also reflected in domestic liquidity, or M3, which expanded by 6.1 percent year-on-year in March to ₱18.2 trillion, easing from 6.3 percent in February. Month-on-month, M3 increased by just 0.7 percent, suggesting a more tempered pace of liquidity expansion.
The BSP attributed the moderation in liquidity and credit growth to easing loan expansion across key sectors. Loans for production activities grew by 10.9 percent in March, down from 11.2 percent in February, with slower lending observed in real estate, trade, construction, and information sectors. Consumer loans also grew at a reduced pace of 23.6 percent from 24.1 percent, despite sustained demand for credit card, motor vehicle, and salary-based loans.
Meanwhile, claims on the private sector rose by 11.5 percent in March, slowing from 12.3 percent in February, reflecting subdued momentum in bank credit to corporations and households. Net foreign assets of banks also declined, further dampening liquidity conditions.
Amid these trends, the BSP emphasized that it remains committed to ensuring that domestic liquidity and lending conditions align with its monetary policy stance, reinforcing its mandate of maintaining price and financial stability.
