March bank lending growth at seven-month high

PHILIPPINE BANKS’ lending to businesses and consumers marked its fastest expansion in seven months in March, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.

Outstanding loans of universal and commercial banks, net of reverse repurchase agreements, grew by 10.7% to P14.603 trillion as of March from P13.192 trillion in the same month last year.

This was faster than the revised 9.6% climb in February and was the quickest loan growth posted since the 11.2% in August.

On a seasonally adjusted basis, big banks’ lending activities rose by 1.7% month on month.

“Loans from universal and commercial banks grew at a faster pace in March 2026, providing even stronger support for production activities of businesses and consumption of households,” the central bank said in a statement late Monday.

Lending to residents went up by 11.1% year on year to P14.299 trillion from P12.869 trillion previously. This was an improvement from the revised 10.2% in February.

Most of the loans were extended for production activities, which climbed by 9.7% to P12.322 trillion from P11.228 trillion previously.

The expansion was driven by 26.7% annual increase lending to the electricity, gas, steam, and air-conditioning supply industry. Other segments that showed growth in lending include transportation and storage (19.4%); wholesale and retail trade, repair of motor vehicles and motorcycles (9.3%); and real estate activities (8.8%).

Meanwhile, big banks’ consumer loans to residents rose by 20.5% to P1.977 trillion in March from P1.641 trillion a year ago, slightly easing from the 20.8% expansion in February. These include credit card, motor vehicle, and general-purpose salary loans but exclude residential real estate loans.

BSP data showed lending via credit cards jumped 27.9% to P1.229 trillion from P960.55 billion the prior year, while loans for motor vehicles grew by 12.5% to P538.286 billion from P478.67 billion.

For salary loans, banks lent out a total of P166.934 billion, up 4.2% from P160.273 billion last year.

On the other hand, outstanding loans to nonresidents, including those disbursed by big banks’ foreign currency deposit units, declined by 5.9% to P303.993 billion in March from P323.028 billion a year earlier. This was smaller than the 13.9% drop logged in the same month in 2025.

The central bank monitors banks’ lending activities to track the transmission of monetary policy.

“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,” the BSP said.

FASTER MONEY SUPPLY GROWTH
Liquidity growth also picked up in March to 12% from 10.3% in February, according to separate central bank data.

Domestic liquidity or M3 — a measure of the amount of money in the economy that includes currencies in circulation, bank deposits, and other financial assets easily convertible to cash — rose to P20.365 trillion from P18.181 trillion last year.

Month on month, M3 inched up by 1.7% on a seasonally adjusted basis.

“Domestic liquidity growth was driven primarily by the continued expansion in borrowings by non-financial private corporations and households,” the BSP said.

Domestic claims, which include those from private and government sectors, came in higher by 11.5% to P23.068 trillion in March from P20.685 trillion the previous year.

This as claims on the private sector stood at P14.804 trillion during the month, with growth quickening to 11.8% from 10.6% in February.

Meanwhile, the central government’s increased issuances of government securities boosted its net claims to P6.258 trillion, up 12.1% year on year from P5.581 trillion.

Claims on a sector refer to that sector’s liabilities to depository corporations such as banks and the central bank.

Preliminary BSP data also showed that net foreign assets (NFAs) in peso terms grew by 8.6% to P7.391 trillion from P6.808 trillion a year prior.

The central bank’s NFAs edged up by 4.9% to P6.445 trillion, while banks’ NFA position climbed slower by 4.2% to P946.141 billion amid lower foreign currency-denominated bills.

NFAs reflect the difference between depository corporations’ claims and liabilities to nonresidents. — Katherine K. Chan