Bank lending, domestic liquidity grow in March

Bank lending in the Philippines maintained its double-digit growth in March 2025, while domestic liquidity also posted a solid increase, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.

Preliminary data showed that the outstanding loans of universal and commercial banks (U/KBs) rose by 11.8 percent year-on-year to P13.18 trillion. This was slightly slower than the 12.2 percent expansion recorded in February, but still reflected sustained credit activity across key sectors.

The BSP noted that outstanding loans to residents, net of reverse repurchase agreements (RRPs), expanded by 12.3 percent in March, also marginally down from the 12.6 percent growth the previous month. Loans to non-residents declined further by 5.6 percent, following a 3.2 percent drop in February.

Growth in production loans eased to 10.9 percent, as lending to major sectors moderated. These included real estate activities (9.6 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (11.6 percent); information and communication (8.9 percent); and construction (1.8 percent).

The central bank also reported slower loan growth in arts, entertainment, and recreation (12.6 percent), water supply and waste management (12.9 percent), and accommodation and food service activities (19.3 percent).

Meanwhile, consumer loans to residents surged by 23.6 percent, supported by increased credit card usage, motor vehicle loans, and salary-based general-purpose consumption lending.

In a separate update, the BSP said domestic liquidity or M3 grew by 6.1 percent year-on-year in March to around P18.2 trillion, slightly below the 6.3 percent expansion recorded in February.

Domestic claims were up by 10.4 percent in March, driven by a continued rise in bank lending to non-financial private corporations and households. Private sector claims rose by 11.5 percent, while net claims on the national government accelerated to 8 percent from 5.9 percent due to increased public borrowings.

Net foreign assets (NFA) in peso terms grew by 2.5 percent, compared to 5.8 percent in February. The BSP’s NFA climbed by 4.5 percent, benefiting from higher gross international reserves, while banks’ NFA declined, largely due to an uptick in foreign currency-denominated bills payable.

“The BSP will continue to ensure that domestic liquidity conditions remain consistent with the prevailing stance of monetary policy, in line with its price and financial stability objectives,” the central bank said.