Bank loans rise 11.3% in May 

Bank lending in the Philippines sustained its growth momentum in May, rising by 11.3 percent year-on-year as both businesses and consumers increased their borrowings, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed in a report by Philippine Star.

This marked a slight uptick from the 11.2 percent expansion recorded in April, showing that credit activity remained resilient amid a softening economic outlook. It was also the fastest print in two months or since the 11.8-percent expansion in March.

Loans released by big banks amounted to P13.37 trillion as of end-May, P1.35 trillion higher than the P12.02 trillion disbursed in the same period in 2024.

For March, loans to residents grew by 11.8 percent annually, slightly slower than the 11.9 percent increase in April. Meanwhile, lending to non-residents continued to decline, posting a 6.6-percent drop in May following a 10-percent decrease the previous month.

Borrowings for production activities, which account for the bulk of bank credit, rose by 10.2 percent year-on-year in May, with the BSP noting a tempered expansion in key sectors.

Loan growth to the real estate sector eased to 8.7 percent from 8.9 percent a month ago. This brought lending to real estate activities at P2.7 trillion in May.

Meanwhile, lending to wholesale and retail trade rose by 9.8 percent to P1.5 trillion, also slower than April’s 9.9 percent. Transportation and storage loans also grew at a slower 14 percent pace to P519.74 billion.

The manufacturing sector saw a three-percent contraction in lending, highlighting some weaknesses in industrial activity during the month.

On the other hand, consumer loans to residents continued to post robust gains, growing by 23.7 percent in May, slightly down from 24 percent in April.

Credit card borrowings surged by 29.4 percent to P1 trillion, while motor vehicle loans and salary-based consumption loans posted double-digit increases of 18.2 percent to P490.74 billion and 8.7 percent to P161.5 billion, respectively.

According to the BSP, bank lending plays a crucial role in the transmission of monetary policy. It reiterated its commitment to ensuring that domestic liquidity and credit conditions remain in line with its price and financial stability objectives.