Bank lending posts fastest growth in 9 months in April

MANILA, Philippines – Bank lending expanded at its fastest pace in nine months in April, underscoring the continued flow of credit to the economy despite the shock caused by the Middle East conflict.

Outstanding loans issued by large banks rose 11.4 percent from a year earlier to P14.8 trillion, according to data released by the Bangko Sentral ng Pilipinas (BSP). The increase was the strongest since July 2025, when lending grew 11.8 percent.

READ: Philippine bank lending grows 9.5% in February

Compared with the previous month, bank lending increased by more than 1 percent on sustained credit demand in the second quarter, based on the BSP’s latest survey of senior bank loan officers.

Separate BSP data showed that domestic liquidity, or M3—the broadest measure of money supply—increased by 12.2 percent year on year to P20.3 trillion in April, largely unchanged from the pace recorded a month earlier.

Economists have said the pickup in lending likely reflected resilient domestic demand and ample liquidity in the financial system rather than spillovers from external developments like the Middle East conflict. 

READ: Bank loans grow faster despite Middle East shock

The latest figures likewise suggested that credit creation and liquidity conditions remain primarily driven by domestic factors, with the war seen exerting only limited effects on financial intermediation so far.

The acceleration in lending was mainly driven by increased borrowing from businesses. Loans to productive sectors rose by 10.7 percent in April, reaching P12.5 trillion, which is faster than the 9.7 percent growth recorded the previous month.

Credit grew across several major industries, led by electricity, gas, steam and air-conditioning supply, where lending jumped 25.8 percent. Borrowing also increased for wholesale and retail trade, including the repair of motor vehicles and motorcycles, which grew 11.8 percent; real estate activities, up 8.1 percent; financial and insurance activities, up 6.7 percent; and manufacturing, which posted a modest 1-percent increase.

Consumer lending remained robust, though growth eased slightly. Loans to households rose 19.6 percent from a year earlier to nearly P2 trillion, though lower from 20.5 percent in March as growth in credit card and motor vehicle loans moderated.

The BSP monitors bank loans because they are a key transmission channel of monetary policy. /pai INQ