LOANS extended by Universal and Commercial Banks (UKBs) posted their slowest growth in nine months, according to the Bangko Sentral ng Pilipinas (BSP).
BSP data showed loans from UKBs grew 11.2 percent in August 2025, the slowest since the 11.1 percent posted in November 2024. In April 2025, these loans also grew 11.2 percent.
The data showed that after adjusting for seasonal fluctuations, outstanding UKB loans increased by 0.4 percent month-on-month in August.
‘The BSP monitors bank loans because they are a key transmission channel of monetary policy. Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability mandates,’ BSP said.
Outstanding loans to residents grew by 11.6 percent in August-also the slowest posted since the 11.4 percent in November 2024.
BSP also said outstanding loans to non-residents recorded a decline of 5.9 percent in August, an improvement from the contraction of 8.1 in July, but a reversal from the 1.5-percent growth posted in August 2024.
Loans meant to finance business activities grew 9.9 percent in August 2025, the slowest since the 9.8 percent recorded in November 2024. Last year, loans for these establishments saw a 9.4 percent increase.
BSP said lending increased for real estate activities at 11 percent; electricity, gas, steam, and air-conditioning supply, 28.1 percent; wholesale and retail trade, repair of motor vehicles and motorcycles, 8.1 percent; financial and insurance activities, 6.9 percent; and information and communication, 7.5 percent.
Meanwhile, consumer loans to residents-which included credit card, motor vehicle, and general-purpose salary loans-increased by 23.9 percent the fastest since the 24 posted in June 2025.
The data showed credit card loans posted a 29.7-percent growth, the highest since the 29.9 percent posted in June while Motor Vehicle Loans grew 19.4 percent, the fastest in eight months or December 2024 when these borrowings increased 19.5 percent.
Salary-Based General Purpose Consumption Loans, meanwhile, grew 6.4 percent in August 2025. This is the slowest in over three years or May 2022 when these borrowings posted a 6.3 percent growth.
The BSP data also showed other consumer loans grew 20.1 percent in August 2025, the slowest since the 15.8 percent recorded three years ago or August 2022.
Meanwhile, with the increase in loans, the BSP reported that domestic liquidity or M3, the amount of money in the economy, grew by 6.6 percent year-on-year, the fastest growth since January 2025.
Domestic liquidity is about P18.59 trillion in August 2025, the lowest level recorded since the P18.54 trillion posted in June 2025.
‘M3 is a broad measure of money supply that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash,’ BSP said.
The BSP said M3 is a driver of money supply, claims on the domestic sector, which includes private and government entities in the country, rose by 9.8 percent year-on-year in August from 10.5 percent in July.
‘Claims on a sector represent that sector’s liabilities to depository corporations [e.g., banks and the central bank],’ BSP said.
Claims on the private sector alone grew by 11.1 percent in August from 11 percent in the previous month, driven by the continued expansion in bank lending to non-financial private corporations and households.
Net claims on the central government increased by 6.1 percent from 7.1 percent in the previous month, driven by its higher borrowings.
Net foreign assets (NFA) in peso terms rose by 4.8 percent year-on-year in August from the 0.6-percent decline in July. NFA represents the difference between claims on nonresidents and liabilities to nonresidents of depository corporations.
The BSP’s NFA increased by 0.7 percent. The banks’ NFA also grew amid a decline in their foreign currency-denominated bills payable.