Bank lending growth eased in December, signaling a modest slowdown in credit expansion as monetary conditions continue to ripple through the economy.
Preliminary data show that loans extended by universal and commercial banks rose by 9.2 percent year-on-year in December, down from 10.3 percent in November. While still firmly in expansion territory, the softer pace suggests a gradual moderation in borrowing activity toward the end of the year.
On a month-on-month basis, and after adjusting for seasonal factors, outstanding loans declined by 2.0 percent in December, reflecting slower credit demand or cautious lending behavior during the holiday period.
Loans to residents remained the primary growth driver, expanding by 9.7 percent in December from 10.7 percent the previous month. In contrast, lending to non-residents continued to contract, falling by 8.1 percent, deeper than the 4.5-percent decline recorded in November.
Business lending, which accounts for the bulk of banks’ loan portfolios, grew by 8.0 percent in December. Key sectors posting solid credit growth included real estate activities at 8.3 percent; electricity, gas, steam and air-conditioning supply at a robust 26.8 percent; wholesale and retail trade, including repair of motor vehicles and motorcycles, at 10.8 percent; and financial and insurance activities at 3.9 percent.
Consumer lending remained a bright spot, though it also showed signs of tempering. Loans to households — including credit card receivables, auto loans, and salary-based general-purpose loans — expanded by 21.4 percent in December, easing slightly from 22.9 percent in November but still reflecting strong household demand.
The Bangko Sentral ng Pilipinas closely monitors bank lending as it serves as a key transmission channel of monetary policy. Changes in interest rates and liquidity conditions typically filter through the banking system and influence borrowing, spending, and investment decisions.
Looking ahead, the central bank said it will continue to ensure that domestic liquidity and credit conditions remain aligned with its mandates of maintaining price stability and safeguarding financial system resilience.