Bank lending growth steadies at 10.3% in November

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January 15, 2026 | 12:00am

MANILA, Philippines — Credit growth continued to expand at a steady pace in November last year, supported by resilient business activity and strong consumer demand, even as high interest rates and lingering confidence risks temper the outlook.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed outstanding loans of universal and commercial banks amounted to P13.99 trillion in November 2025, 10.3 percent higher than the P12.68 trillion recorded in the same month in 2024.

The latest growth rate was unchanged from the 10.3-percent expansion seen in October last year.

Jonathan Ravelas, senior adviser at profession­al services firm Reyes, Tacandong & Co., said the steady pace of loan growth reflects an economy that continues to move forward despite tight financial conditions.

“Bank lending held steady at 10.3 percent because the core drivers of the economy are still moving — business loans stayed solid across real estate, utilities, trade and transport, while consumer lending remained the real powerhouse with credit cards and salary loans growing over 20 percent,” Ravelas said.

“These are signs that spending hasn’t collapsed despite high rates. But for lending to really accelerate, we’ll need clearer signals of easing inflation and eventually lower interest rates. Once borrowing costs start coming down, you’ll see businesses and households unlock more demand,” he said.

Consumer loans to residents, which include credit card, motor vehicle and general-purpose salary loans, grew by 22.9 percent to P1.89 trillion in November 2025, slightly slower than the 23.1-percent growth posted in October but still among the fastest-expanding segments of bank lending.

Credit card loans increased by 29.5 percent to P1.16 trillion, while motor vehicle loans jumped by 16.3 percent to P524.04 billion.

Salary based general purpose consumption loans also went up by 6.4 percent to P164.93 billion.

The BSP said it closely monitors bank lending as it is “a key transmission channel of monetary policy.” Looking ahead, the central bank said it “will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives.”

Ravelas cautioned, however, that risks to confidence could slow momentum.

“What worries me is that the Floodgate scandal risks slowing that momentum — not because credit fundamentals are weak, but because confidence can take a hit. When trust is shaken, investors hesitate and banks become more cautious,” he said.

He added that restoring confidence would be crucial for sustaining growth in credit.

“So the priority now is restoring credibility and strengthening transparency. If we fix that and inflation continues to ease, lending growth can pick up more strongly by mid-2026,” Ravelas said.