Credit growth slows to 12.2 percent

MANILA, Philippines — Loan growth slowed to 12.2 percent in February, ending three consecutive months of acceleration, after reaching a two-year high of 12.8 percent in January, the Bangko Sentral ng Pilipinas said.

Data from the BSP showed that the outstanding loans of universal and commercial banks amounted to P13.03 trillion as of end-February, P1.42 trillion higher than the P11.61 trillion disbursed in the same period in 2024.

The February growth rate marked the slowest in three months or since the 11.1 percent growth in November 2024.

After resuming its easing cycle via three straight meetings of interest rate cuts cumulatively worth 75 basis points in 2024, the BSP’s Monetary Board kept its benchmark policy rate steady on Feb. 13 amid unusual uncertainties coming from global trade developments.

Central bank data showed outstanding loans for production activities grew at a slower pace of 11.2 percent to P11.08 trillion in February, from 11.8 percent in January, and accounted for 85.1 percent of the total lending.

The real estate sector posted an increase of 9.9 percent to P2.61 trillion and accounted for 20 percent of the total disbursements.

Lending to the electricity, gas, steam and airconditioning supply sector likewise grew at a slower rate of 21.5 percent to P1.55 trillion for a share of 11.9 percent.

Credit to industries in wholesale and retail trade as well as repair of motor vehicles and motorcycles also expanded by 13.7 percent to P1.48 trillion for an 11.4-percent share.

Lending to the manufacturing sector booked a modest 0.9-percent increase to P1.25 trillion for a share of 9.6 percent.

Consumer loans also jumped by 24.1 percent to P1.62 trillion as of end-February, or about 12.4 percent of the total loans disbursed by big banks. This is a tad slower than the 24.4 percent expansion in the previous month.

Credit card loans rose by 28.9 percent to P950.97 billion from P737.93 billion a year ago.

Auto loans zoomed by 19.2 percent to P470.13 billion, while salary-based general-purpose consumption loans increased by 11.5 percent to P158.16 billion.

Meanwhile, separate BSP data showed that domestic liquidity, or the amount of money in circulation, grew slower by 6.3 percent to about P18 trillion in February.

Domestic claims quickened to 10.1 percent while claims on the private sector grew by 12.3 percent, driven by continued expansion in bank lending to non-financial private corporations and households.

Net claims on the government also rose by 5.9 percent, slower than the 7.4 percent in January, due to lower deposits of the national government with the BSP compared to a year ago.