Philippine Bank Lending Rebounds to 2-Month High in July Driven by Corporate Borrowing

MANILA, Philippines — Bank lending growth picked up to a two-month high in July as borrowing by businesses strengthened, offsetting a continued moderation in consumer credit amid weak household confidence. Loans extended by universal and commercial banks grew by 10.4 percent year-on-year in July, accelerating from 9.8 percent in June, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed. The July pace was the fastest in two months or since the 12.1 percent growth recorded in May. The total loan portfolio of big banks reached P14.98 trillion in July, up from P13.57 trillion a year earlier and P14.88 trillion in June. The pickup was driven mainly by business lending, which accelerated to 9.8 percent in July from 9.2 percent in June. Outstanding loans used for production activities reached P12.62 trillion, equivalent to 84.3 percent of total bank credit. Stronger credit growth was recorded across several major industries. Loans to the electricity, gas, steam and air-conditioning supply sector jumped by 24.4 percent to P2.11 trillion, while lending to wholesale and retail trade, including repair of motor vehicles and motorcycles, rose by 8.8 percent to P1.64 trillion. Manufacturing loans increased by 7.2 percent to P1.28 trillion, while credit to financial and insurance activities grew by 5.4 percent to P1.15 trillion. Likewise, loans to the information and communication sector expanded by 7.1 percent to P761.16 billion. Meanwhile, lending to real estate activities, the largest individual borrowing sector, increased at a more moderate pace of 5.5 percent to P2.89 trillion. Some industries remained weak. Construction loans contracted by 13.3 percent to P447.49 billion, while lending to education slipped by 1.1 percent to P30.23 billion. Agriculture, forestry and fishing loans grew by just 1.2 percent to P238.03 billion, a marked slowdown from the 15.1-percent expansion recorded in June. On the household side, consumer loan growth continued to lose momentum. Consumer loan growth slowed for an 11th straight month to 17.1 percent in July from 17.8 percent in June, extending a steady deceleration from the 23.9-percent expansion recorded in August 2025. The BSP attributed the moderation to softer growth in credit card and motor vehicle loans as “consumer confidence remained weak.” Credit card loans, which accounted for the biggest portion of consumer borrowing, still posted strong growth of 24.5 percent to P1.3 trillion, although this eased from 24.9 percent in June. Motor vehicle loans expanded by seven percent to P542.85 billion, slower than the previous month’s 8.6-percent growth. Salary-based general-purpose consumption loans, meanwhile, grew by 9.9 percent to P179.66 billion, matching the pace recorded in June. The BSP closely tracks lending because changes in borrowing are one way monetary policy works its way through the economy. Looking ahead, the BSP said it would continue to ensure that bank lending and domestic liquidity conditions remain consistent with its price and financial stability mandate. Separate central bank data showed that domestic liquidity grew by 10.3 percent to P20.5 trillion in July, slower than the revised 10.7 percent a month ago. Information source: Philstar Business