MANILA, Philippines — Credit growth eased for a second straight month in March, with loans extended by universal and commercial banks growing by just 11.8 percent year-on-year, driven by slower demand from key production sectors.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that credit growth eased from the 12.2-percent expansion in February.
It marked the slowest pace since November 2024, when lending expanded by only 11.1 percent.
Loans released by big banks amounted to P13.19 trillion as of end-March, P1.4 trillion higher than the P11.79 trillion disbursed in the same period in 2024.
Lending to residents grew at a slower 12.3 percent in March from 12.6 percent in February, while loans to non-residents continued to decline, tumbling by 5.6 percent after a 3.2-percent drop in the previous month.
Bank credit to key production sectors, which accounted for 85 percent of total releases, expanded at a more moderate pace of 10.9 percent in March, cooling from 11.2 percent in February.
Growth was dampened by slower lending to real estate (9.6 percent), trade, repair of motor vehicles and motorcycles (11.6 percent), information and communication (8.9 percent) as well as construction (1.8 percent).
Some industries still posted double-digit increases, such as accommodation and food services (19.3 percent) and arts and recreation (12.6 percent).
Meanwhile, consumer lending remained robust, rising by 23.6 percent year-on-year, although slightly down from 24.1 percent in February.
The increase was supported by strong demand for credit card loans, car loans and salary-based loans.
Credit card receivables surged by 28.8 percent to P959.43 billion in March from P744.7 billion in the same month in 2024.
However, the pace was a tad slower than the 28.9 percent growth in February.
Auto loans rose by 18.8 percent to P477.79 billion from P402.11 billion, while salary-based general-purpose consumption loans grew by 8.9 percent to P158.71 billion.
Bank lending is a key driver of economic activity as it reflects the confidence of consumers and businesses to borrow and invest.
Slower credit growth may signal more cautious sentiment or tighter financial conditions.
Nicholas Antonio Mapa, chief economist at Metrobank, said that while lending activity remains solid, it could gain further momentum with additional monetary policy easing.
He also noted that capital formation in the first quarter grew by a modest four percent, indicating potential for stronger investment activity.
“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability objectives,” the central bank said.
The BSP also reported a 6.1-percent increase in money supply to P18.2 trillion in March. The latest growth rate is slower than the 6.3 percent expansion in February.