PHILIPPINE BANKS’ loans to businesses and consumers marked their fastest increase in seven months in March, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
Outstanding loans of international and commercial banks, net of repurchase agreements, grew 10.7% to P14.603 trillion as of March from P13.192 trillion in the same month last year.
This was faster than the 9.6% increase revised in February and the fastest loan growth posted since 11.2% in August.
Seasonally adjusted, central banks’ lending activity rose 1.7% in the month.
“Loans from international banks and businesses grew at a rapid pace in March 2026, providing strong support to business productive activity and household consumption,” the central bank said in a statement late Monday.
Loans to citizens increased by 11.1% year-on-year to P14.299 trillion from P12.869 trillion previously. This was an improvement compared to the 10.2% revised in February.
Most of the loans extended to manufacturing activities, which increased by 9.7% to P12.322 trillion from P11.228 trillion previously.
This expansion is fueled by a 26.7% annual increase in revenue in the electricity, gas, steam, and air conditioning industry. Other sectors that have shown growth in lending include transportation and storage (19.4%); wholesale and retail trade, repair of cars and motorcycles (9.3%); and housing activities (8.8%).
Meanwhile, consumer loans of major banks to residents increased 20.5% to P1.977 trillion in March from P1.641 trillion a year ago, a slight decrease from the 20.8% increase in February. This includes credit card, car, and general purpose loans but does not include home loans.
BSP data showed that credit card loans jumped 27.9% to P1.229 trillion from P960.55 billion a year ago, while car loans grew 12.5% to P538.286 billion from R478.67 billion.
In salary loans, banks lent a total of P166.934 billion, up 4.2% from P160.273 billion last year.
On the other hand, outstanding loans to non-residents, including those issued by major foreign-currency banks, decreased by 5.9% to P303.993 billion in March from P323.028 billion last year. This was less than the 13.9% decline recorded in the same month in 2025.
The central bank monitors the lending activities of banks to track the transmission of monetary policy.
“Looking forward, the BSP will ensure that domestic credit and bank lending conditions remain consistent with its rates and financial stability objectives,” said the BSP.
RAPID MONEY SUPPLY GROWTH
Liquidity growth increased in March to 12% from 10.3% in February, according to central bank data.
Domestic liquidity or M3 – a measure of the amount of money in the economy that includes current accounts, bank deposits, and other financial assets that can easily be converted into cash – increased to P20.365 trillion from P18.181 trillion last year.
Month-on-month, M3 increased by 1.7% on a seasonally adjusted basis.
“The growth in domestic capital was mainly driven by the continued increase in borrowing by the non-financial private sector and households,” the BSP said.
Domestic claims, which include those from the private and public sectors, increased 11.5% to P23.068 trillion in March from P20.685 trillion a year ago.
This as private sector claims stood at P14.804 trillion for the month, growth increased to 11.8% from 10.6% in February.
Meanwhile, the central government’s increase in public debt raised its claims to P6.258 trillion, up 12.1% year-on-year from P5.581 trillion.
Industry claims refer to the industry’s debts to depository institutions such as banks and the central bank.
Preliminary BSP data also showed that net foreign assets (NFAs) in peso terms grew 8.6% to P7.391 trillion from P6.808 trillion last year.
Central bank NFAs increased by 4.9% to P6.445 trillion, while the banks’ NFA position increased slightly by 4.2% to P946.141 billion amid lower foreign currency liabilities.
NFAs show the difference between corporate claims and liabilities to non-residents. – Katherine K. Chan
