Bank lending accelerates to 11.4% in September

Bank lending in the Philippines accelerated in September, reflecting sustained demand for credit from businesses and consumers, while domestic liquidity continued to expand amid increased borrowing by the private and public sectors, the Bangko Sentral ng Pilipinas (BSP) reported.

Data released Thursday showed outstanding loans of universal and commercial banks grew by 11.4 percent year-on-year to ₱15.26 trillion, faster than the 11 percent expansion recorded in August.

The September figure was also significantly higher than the ₱13.38 trillion outstanding loans recorded during the same month last year.

Loans extended to resident borrowers, which account for the bulk of total bank lending, increased by 11.7 percent.

Credit to businesses expanded by 11 percent, supported by stronger lending to the electricity, gas, steam and air-conditioning supply sector, manufacturing, real estate, transportation and storage, wholesale and retail trade, and financial and insurance activities.

Consumer lending likewise sustained its double-digit growth, rising 16.2 percent on continued expansion in credit card and motor vehicle loans.

The BSP considers bank lending an important channel through which monetary policy influences economic activity, as changes in credit conditions affect business investments and household spending.

Meanwhile, domestic liquidity, measured by the M3 money supply, increased by 9.3 percent to ₱20.7 trillion in September, reflecting sustained credit activity and continued borrowing by both private businesses and the government.

The expansion was also supported by the national government’s financing operations, including debt issuances and withdrawals of deposits from the BSP and commercial banks.

These gains, however, were partly offset by a 2.3-percent contraction in the BSP’s net foreign assets, while banks also recorded lower net foreign assets, mainly due to reduced holdings of foreign debt securities.

The central bank said it would continue managing domestic liquidity to ensure that monetary conditions remain consistent with its objectives of maintaining price and financial stability.