CREDIT growth is seen holding firm in the coming months, as strong domestic demand and a more accommodative monetary policy continue to fuel bank lending, according to the Bangko Sentral ng Pilipinas (BSP).
In the BSP’s ‘Report on the Philippine Financial System for the First Semester of 2025,’ bank lending grew by 10.9 percent to P15.9 trillion in June 2025 on the back of strong domestic demand.
The BSP said the expansion of corporate loan portfolios was fueled by robust sectoral demand, particularly from the energy and real estate sectors, as well as from small- and medium-sized enterprises.
The growth on the retail side, meanwhile, was supported by digitalization initiatives, such as cross-selling, targeted marketing and data-driven lead generation-particularly in housing and auto loans, the central bank added.
Improving economic conditions, with the ratio of banks’ credit-to-GDP rising from 56.3 percent in June 2024 to 58.0 percent in June 2025, also contributed to sustained bank lending.
‘Expectations of further policy rate reductions and a supportive macro-financial environment are expected to bolster lending activity moving forward,’ the BSP said.
Lending remained mostly domestic in orientation and broad-based across key sectors, with real estate continuing to be the top borrowing sector, consisting of 18.1 percent of total loans.
Households, electricity and utilities, wholesale and retail trade, manufacturing and financial and insurance activities are some of the other major borrowers, according to the BSP.
Further, growth in consumer lending also reached record levels, driven by strong borrower demand, favorable financing terms and improved consumer sentiment.
Total consumer loans, accounting for 21.4 percent of total loans, went up by 21.2 percent to P3.4 trillion, surpassing the 19.7 percent growth in June 2024.
Despite evolving risks and emerging opportunities, the BSP said the Philippine banking industry maintained its growth momentum in the first half of 2025.
Assets rose 7.7 percent year-on-year to P28.2 trillion in June this year, supported by stable domestic deposits and strong liquidity and capital buffers.
Loans and investments comprised the bulk of total assets, and asset quality management remained satisfactory, the BSP noted.
As a result of prudent risk management and sound credit governance, profit grew by 4.1 percent year-on-year to P198.1 billion in the first half of the year.
‘The banking system’s solid performance underscores its strength in seizing opportunities, navigating emerging risks, driving innovation, and championing inclusive and sustainable growth,’ BSP Governor Eli M. Remolona, Jr. said.
‘In line with this, the BSP will continue pursuing policies that further strengthen the banking system. This supports an environment that helps banks to continue growing, supporting economic activity, and responding to the evolving needs of Filipinos,’ Remolona added.