The outstanding loans from universal and commercial banks continued to rise in October although growth eased a bit. Preliminary Bangko Sentral ng Pilipinas (BSP) data show bank lending grew 10.3 percent year-on-year, down from 10.5 percent in September. On a month-to-month basis, lending increased 0.6 percent after seasonal adjustments.
Loans to residents held steady at 10.9 percent growth, while loans to non-residents fell sharply by 11.1 percent. Business loans expanded by 9.1 percent, supported by stronger lending to key industries such as real estate, utilities, trade, finance, ICT, and transport. Consumer loans—mainly credit cards, auto loans, and salary loans—remained robust but grew at a slightly slower pace of 23.1 percent.
The BSP closely watches lending trends because they influence how its policy decisions flow through the economy. Faster lending can stimulate economic activity, while slower lending can help cool inflation.
Money circulating in the economy, known as domestic liquidity or M3, also grew by 8.3 percent to about ₱19.1 trillion in October—faster than September’s revised 7.6 percent. Seasonally adjusted M3 also rose 1 percent month-on-month. M3 includes cash, bank deposits, and other assets that can quickly be turned into cash.
The increase in money supply was driven mainly by a 10.5 percent rise in claims on the domestic sector, which reflect the borrowing of private companies, households, and the government. Claims on the private sector grew 11 percent, supported by steady loan expansion. Government borrowing also contributed, with net claims on the central government up 10 percent.
Net foreign assets rose 2.1 percent, although the BSP’s own foreign assets dipped slightly. The banks’ foreign assets increased as their foreign currency obligations went down.
The BSP said it will continue to ensure that liquidity and lending conditions support both price stability and financial stability—two factors central banks track closely to prevent inflation from rising too fast or financial risks from building up.
