Bank lending picks up pace in June

MANILA, Philippines — Banks continued to post a double-digit growth in loan disbursements, with credit growth rising by 12.1 percent in June from 11.3 percent in May, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Lending growth marked the fastest in four months or since the 12.2-percent expansion in February. June was also the second straight month that credit growth went up.

In terms of volume, outstanding loans of big banks stood at P13.6 trillion as of end-June, P1.5 trillion higher than the P12.1 trillion recorded in the same period last year.

Credit growth has stayed in double-digit territory since May 2024, supported by the BSP’s easing cycle, which has so far brought down policy rates by a total of 125 basis points since August last year.

Based on BSP data, outstanding loans meant to fund business activities increased by 11.1 percent to P11.5 trillion in June from P10.3 trillion in the same month last year. This is faster than the 10.2-percent growth a month ago.

The real estate sector posted a strong 9.9-percent jump to P2.73 trillion and accounted for 20.1 percent of the total disbursements, while lending to the electricity, gas, steam and airconditioning supply sector surged by 29.2 percent to P1.67 trillion for a share of 12.4 percent.

Loan disbursements to financial and insurance activities grew at a faster rate of 12 percent to P1.1 trillion, with a share of 8.1 percent. Credit for the transportation and storage sector also increased by 15.9 percent to P533 billion.

On the other hand, consumer loans recorded a faster growth of 24 percent to P1.74 trillion.

Credit card loans surged by almost 30 percent to P1.04 trillion while motor vehicle loans zoomed by 18.4 percent to P498 billion.

Salary-based general-purpose consumption loans climbed by 8.3 percent to P162 billion.

“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,” the central bank said.

Meanwhile, separate data from the BSP showed that domestic liquidity or M3 expanded by 6.3 percent to about P18.6 trillion in June.

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.