Loan growth in the Philippines eased to its slowest pace in nine months as lending to businesses moderated in August despite resilient consumer demand, according to the Bangko Sentral ng Pilipinas (BSP).
Preliminary figures showed that loans disbursed by universal and commercial banks, net of their reverse repurchase placements with the BSP, expanded by 11.2 percent year-on-year in August, slower than the 11.8 percent increase in July.
The August reading marked the weakest growth in nine months or since the 11.1 percent pace in November 2024. On a seasonally adjusted month-on-month basis, outstanding loans rose by just 0.4 percent.
Bank loans reached P13.62 trillion in August, higher by P1.37 trillion compared to the P12.25 trillion recorded in the same month last year.
The BSP monitors bank loans because these are a key transmission channel of monetary policy.
Bank loans to residents expanded by 11.6 percent, also slower than the 12.4 percent increase recorded in July. Meanwhile, loans to non-residents posted a smaller contraction of 5.9 percent from the 8.1 percent decline a month earlier.
Borrowings intended to finance production activities grew by 9.9 percent, decelerating from 10.8 percent in July.
The rise in disbursements to the volatile real estate sector quickened to 11 percent in August from 10.7 percent a month ago with P2.77 trillion, followed by the electricity, gas, steam and air-conditioning supply sector with a slower increase of 28.1 percent to P1.7 trillion.
The growth in loans extended to the wholesale and retail trade sector slowed to 8.1 percent with P1.51 trillion. Lending also increased for financial and insurance activities (6.9 percent) and information and communication (7.5 percent).
On the other hand, loans to the manufacturing sector fell by 5.5 percent to P1.21 trillion, although this was better than the 6.3 percent decline a month ago.
Consumer loans remained a bright spot, sustaining strong growth of 23.9 percent in August from 23.6 percent in July. The BSP noted that credit card, motor vehicle and salary-based loans continued to drive this segment.
Credit card loans soared by 29.7 percent to P1.07 trillion from P827.43 billion. Auto loans went up by 19.4 percent to P513.06 billion, while salary-based general-purpose consumption loans inched up by 6.4 percent to P164.5 billion.
‘Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability mandates,’ the central bank said.
Separate BSP data showed that the growth in domestic liquidity stood at 6.6 percent in August, higher than the 6.2-percent increase in July. Money supply stood at around P18.6 trillion.