BSP: Steady loan growth signals optimism in domestic markets

Bank lending in the Philippines rose slightly in May 2025, even as overall domestic liquidity posted a modest deceleration, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP).

Outstanding loans extended by universal and commercial banks grew by 11.3% year-on-year, up from 11.2% in April. The central bank attributed the growth to sustained lending to both businesses and households, with total loans reaching PHP13.37 billion.

However, the rate of increase in loans to residents eased to 11.8%, while credit to non-residents contracted by 6.6%. Business-related loans also decelerated slightly, with lending to key sectors such as real estate, wholesale and retail trade, and transportation expanding at a more subdued pace. Manufacturing loans continued to decline, falling by 3% in May.

Consumer lending, on the other hand, remained strong. Personal loans—including auto, motorcycle, credit card, and salary loans—rose by 23.7%, albeit slightly slower than April’s 24% growth.

The BSP emphasized the importance of monitoring credit trends as a key element in the implementation of monetary policy.

Domestic liquidity, or M3, expanded by 5.5% year-on-year to PHP18.4 trillion in May, lower than the 5.8% recorded the previous month. The deceleration was attributed to slower growth in bank claims on the private sector and the central government, as well as a 4.6% decline in net foreign assets, largely driven by peso appreciation and higher foreign currency liabilities.

Despite the moderating liquidity and credit conditions, the BSP reiterated its commitment to maintaining monetary and financial stability.