Philippine bank lending growth accelerates as September credit demand stays firm

Traders Union
All News
Financial Institutions
Philippines bank lending growth September

Highlights

Total outstanding loans of universal and commercial banks rose 11.4% year on year to P15.265 trillion in September from P13.704 trillion.
Lending to residents climbed 11.7% to P14.952 trillion, driven by production activities and consumer loans, with credit card loans surging 22.8% to P1.344 trillion.
Economists expect bank lending to continue supporting Philippine economic growth, though pace may ease in Q4 as households and businesses turn cautious.

September lending picks up across business and consumer segments

As reported by BusinessWorld, citing Bangko Sentral ng Pilipinas, total outstanding loans of universal and commercial banks, net of reverse repurchase agreements, rise by 11.4% year on year to P15.265 trillion in September from P13.704 trillion a year earlier, based on preliminary data.

The central bank says lending growth quickens from 11% in August and marks the fastest expansion in four months, since the 12.1% pace recorded in May. On a month-on-month basis, big banks' loans to residents and nonresidents increase by about 1% from P15.121 trillion.

Lending to residents climbs by 11.7% to P14.952 trillion at end-September from P13.389 trillion a year earlier, faster than the 11.3% growth in August. Loans for residents' production activities total P12.837 trillion, up 11% annually from P11.568 trillion, with growth driven largely by electricity, gas, steam, and air-conditioning supply, manufacturing, real estate activities, transportation and storage, wholesale and retail trade, repair of motor vehicles and motorcycles, and financial and insurance activities.

Consumer loans to residents increase by 16.2% to P2.115 trillion from P1.82 trillion a year earlier, matching the annual pace seen in August. The BSP says the expansion is supported in part by continued growth in credit card and motor vehicle loans, while nonresident lending edges down 0.6% to P313.394 billion from P315.214 billion a year earlier.

Economists see continued support for growth, with caution later in the year

Credit card loans jump 22.8% year on year to P1.344 trillion in September, while motor vehicle loans rise by 5% to P542.032 billion. Salary loans amount to P193.804 billion in the nine months to September, up 17.5% annually and faster than the 11.6% expansion recorded a month earlier.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion says the September data indicate that credit demand remains relatively resilient despite elevated inflation and a weaker peso. He says bank lending may still ease in the fourth quarter as businesses and households become more cautious about taking on additional debt amid a challenging and uncertain macroeconomic backdrop.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., says bank lending is likely to continue supporting the economy as inflation and interest rates ease next year. He adds that credit growth remains a clear indicator that the Philippine economy is still expanding, with lending expected to remain an important pillar for growth into 2027.

The central bank monitors banks' lending activities as part of tracking the transmission of monetary policy.

Our earlier coverage of Philippine sovereign bond market reforms outlined plans to shift to a new pricing convention for peso-denominated government bonds by 2027 and pursue inclusion in a major emerging-market government bond index, aimed at widening the investor base and improving liquidity. The piece also noted that these upgrades alone may not translate into stronger productive investment, as corporate bond markets remain small and costly to access, leaving many firms reliant on bank lending while broader structural reforms and investor trust remain crucial.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.