April bank lending growth fastest in 9 mos.

PHILIPPINE BANKS’ lending activities continued to expand in April with the industry’s loan growth posting its fastest pace in nine months, the Bangko Sentral ng Pilipinas (BSP) reported late on Friday.

Based on preliminary central bank data, the total outstanding loans of universal and commercial banks, net of reverse repurchase agreements, rose by 11.4% year on year in April to P14.755 trillion from P13.249 trillion.

April marked the fastest loan growth seen in nine months or since 11.8% in July 2025.

On a seasonally adjusted basis, bank lending climbed by 2% month on month, which the BSP said reflected banks’ expectations of steady loan demand from businesses and households this quarter.

According to the BSP’s first-quarter Senior Bank Loan Officers’ Survey, 53.8% of banks polled saw steady loan demand from businesses for the second quarter of the year, while 52.9% anticipated steady credit demand from households.

“Resident loans account for the bulk of total outstanding loans, while a small portion constitutes loans to nonresidents,” the central bank said in a statement.

Lending to residents grew by 11.8% to P14.462 trillion from P12.931 trillion a year ago. This was an improvement from the 11.1% rise seen in March.

Meanwhile, loans extended to nonresidents contracted by an annual 7.9% to P293.112 billion in April from P318.366 billion, steeper than the 5.9% decline logged in the prior month.

In April, banks lent out a total of P12.463 trillion for residents’ production activities, 10.7% higher than the P11.26 trillion it granted last year. This accounted for the bulk of banks’ loans to residents during the period and was faster than the 9.7% growth posted in March.

According to the BSP, this was driven by the 25.8% year-on-year expansion in lending for the electricity, gas, steam, and air-conditioning supply sector. Loans for repair of motor vehicles and motorcycles also rose by 11.8%, real estate activities by 8.1%, financial and insurance activities by 6.7%, and manufacturing by 1%.

On the other hand, consumer loans to residents jumped by 19.6% to P1.999 trillion from P1.671 trillion a year earlier. However, this eased from the 20.5% climb seen in March, which the BSP said followed slower lending in the credit card and motor vehicle segments.

Credit card loans increased by an annual 26.6% to P1.247 trillion in April, easing from the 27.9% rise recorded in the prior month.

Lending for motor vehicles grew by 11.6% to P539.824 billion in April, slightly easing from 12.5% in March.

However, loans for general-purpose salaries rose by 6.1% year on year to P170.236 billion in April, picking up from 4.2% in March.

The central bank monitors banks’ lending activities to track the transmission of monetary policy.

LIQUIDITY RISES FURTHER
Meanwhile, the country’s money supply rose further in April as banks continued to extend loans to nonfinancial private corporations and households.

Separate preliminary BSP data showed domestic liquidity (M3) rose by 12.2% to P20.348 trillion in April from P18.128 trillion in the same month last year.

Month on month, the country’s liquidity nudged 0.7% higher on a seasonally adjusted basis.

“Domestic liquidity growth was driven primarily by the continued expansion in borrowings to nonfinancial private corporations and households,” the central bank said in a statement on Friday.

M3 is a measure of the amount of money in the economy that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash.

April’s expansion was slightly faster than 12.1% in March. It also matched the liquidity growth seen in September 2020 and was the fastest pace in over five years or since 13.7% in August 2020.

Domestic claims, which include those from private and government sectors, came in 12.7% higher to P23.366 trillion in April from P20.735 trillion a year ago.

Broken down, claims on the private sector grew by 12.6% year on year to P15.021 trillion.

“Meanwhile, net claims on the central government increased by 15.1% in April, driven mainly by higher outstanding government securities (GS) and lower deposits with the BSP and banks,” the central bank said.

Net claims on the central government climbed to P6.328 trillion in April.

Claims on a sector refer to that sector’s liabilities to depository corporations such as banks and the central bank.

BSP data also showed that net foreign assets (NFA) in peso terms stood at P7.275 trillion in April, up 8.9% annually.

This as banks’ larger holdings of foreign currency-denominated debt securities boosted their NFA position to P875.709 billion, climbing by 17.2%.

The central bank’s NFAs were likewise higher year on year by 7.9% to P6.399 trillion.

NFAs reflect the difference between depository corporations’ claims and liabilities to nonresidents.

“The BSP will continue to ensure that domestic liquidity conditions remain consistent with its price and financial stability objectives,” the central bank said. — Katherine K. Chan