Bank lending expands by 11.8% in March

MANILA, Philippines — Bank lending remained robust in March but its growth was the slowest in four months, although analysts said the ongoing interest rate-cutting cycle could spur demand for loans.

Preliminary data showed that the outstanding loans of big banks, excluding their lending with each other, had expanded by 11.8 percent year-on-year to P13.2 trillion in March, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.

That was a slower pace of expansion compared with the 12.2-percent loan growth in February.

Zooming out, the latest reading was the softest growth of bank lending since the 11.1-percent expansion in November 2024.

“Lending remains robust but could benefit from additional rounds of easing,” said Nicholas Mapa, chief economist at Metrobank.

Dissecting the BSP’s report, bank lending to businesses to fund various production activities grew by 10.9 percent to P11.2 trillion in March, easing from the 11.2 percent growth in the preceding month. The central bank said there was a slower expansion in credit to companies engaged in real estate, wholesale and retail trade and construction, among others.

Businesses rethink expansion

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Some big banks reported modest profit growth in the first quarter because of global trade uncertainties that prompted many companies to rethink their expansion plans.

Meanwhile, consumer loans remained strong, but growth eased to 23.6 percent in March to P1.6 trillion, from 24.1 percent in February.

Data showed softer increases in credit cards (28.8 percent), motor vehicle loans (18.8 percent) and salary-based general-purpose consumption loans (8.9 percent).

“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.

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